TIDMSAB
RNS Number : 7410C
SABMiller PLC
19 November 2009
?
Interim Announcement
19 November 2009
STRONG UNDERLYING OPERATIONAL PERFORMANCE
SABMiller plc, one of the world's leading brewers with operations and
distribution agreements across six continents, today reports its interim
(unaudited) results for the six months to 30 September 2009.
Operational Highlights
* Lager volumes decrease 1% on an organic basis with growth in Africa and Asia
offset by weaker volumes in other markets
* Reported group revenue down 6% and reported EBITA down 2% impacted by weakness
of our major operating currencies against the US dollar compared with the same
period last year
* Firm pricing and cost efficiency drives organic, constant currency group revenue
growth of 3%, EBITA growth of 11% and margin growth of 110 bps
* EBITA on an organic, constant currency basis increases across all regions
despite mixed volume performance:
- Pricing benefits and cost efficiencies in Latin America drive
excellent EBITA(1) growth of 33%
- Solid pricing in Europe supports a 5% increase in EBITA(1) despite
volume decline
- North America EBITA(1) grows 7% as cost synergies are realised
- Africa EBITA(1) up 15%, driven by volume growth and pricing
- Asia EBITA(1) up 29% as CR Snow volumes in China grow at more than
double the market rate
- South Africa Beverages EBITA(1) up 4% despite weaker consumer
spending and increased marketing spend
* Free cash flow(2) improves by US$1,124 million compared with the prior year
period
(1) EBITA growth is shown on an organic, constant currency basis.
(2) As defined in the Financial Definitions section. See also note 9b.
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| | Sept | Sept | % change | March |
| | 2009 | 2008 | | 2009 |
| | US$m | US$m | | US$m |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| | | | | |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| Group revenue (a) | 13,355 | 14,222 | (6) | 25,302 |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| | | | | |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| Revenue (b) (excludes associates and joint ventures revenue) | 8,846 | 11,166 | (21) | 18,703 |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| | | | | |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| EBITA (c) | 2,187 | 2,225 | (2) | 4,129 |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| | | | | |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| Adjusted profit before tax (d) | 1,920 | 1,860 | 3 | 3,405 |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| | | | | |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| Profit before tax(e) | 1,498 | 2,020 | (26) | 2,958 |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| | | | | |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| Adjusted earnings (f) | 1,236 | 1,128 | 10 | 2,065 |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| | | | | |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| Adjusted earnings per share | | | | |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| - US cents | 80.0 | 75.2 | 6 | 137.5 |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| - UK pence | 49.9 | 38.9 | 28 | 79.7 |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| - SA cents | 648.9 | 585.8 | 10 | 1,218.6 |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| | | | | |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| Basic earnings per share (US cents) | 63.0 | 94.8 | (34) | 125.2 |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| | | | | |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
| Interim dividend per share (US cents) | 17.0 | 16.0 | 6 | |
+------------------------------------------------------------------+--------------+-------------+---------------+-------------+
+-----------------------------------------------------------------------------
-------------------------------+
| a)Group revenue includes the attributable
share of associates and joint ventures revenue of US$4,509 |
| million
(i.e. including MillerCoors revenue) (2008: US$3,056 million).
|
| b)Revenue excludes the attributable share of
associates and joint ventures revenue. 2009 is not |
| comparable
with 2008 as MillerCoors revenue is not included in 2009, although Miller
Brewing Companys |
| revenue is included in 2008.
|
| c)Note 2 provides a
reconciliation of operating profit to EBITA which is defined as operating profit
before |
| exceptional items and amortisation of intangible assets (excluding
software) but includes the groups share |
| of associates and joint
ventures operating profit, on a similar basis. EBITA is used throughout the
|
| interim announcement.
|
| d)Adjusted profit before tax comprises
EBITA less adjusted net finance costs of US$253 million (2008: |
|
US$358 million) and share of associates and joint ventures net finance costs
of US$14 million (2008: US$7 |
| million).
|
| e)Profit
before tax includes exceptional charges of US$239 million (2008: exceptional
credits of US$371 |
| million).
|
| f)A reconciliation
of adjusted earnings to the statutory measure of profit attributable to equity
|
| shareholders is provided in note 5.
|
+--------------------------------------------------------------------------
----------------------------------+
+-------------------------------------------------+-----------------------------------------+
| CHIEF EXECUTIVE'S REVIEW | |
+-------------------------------------------------+-----------------------------------------+
| | |
+-------------------------------------------------+-----------------------------------------+
Graham Mackay, Chief Executive of SABMiller, said:
"In some of the toughest economic conditions seen for decades, we have continued
to take share in a number of markets. The weakness of our major operating
currencies against the US dollar has affected reported results, but we have
continued to generate a strong underlying performance. The actions we have taken
to position our business globally, to invest in brands and to develop our
operational capabilities will continue to underpin our long term growth."
+-------------------------------+------------+-----------+-------------------+
| | September | Reported | Organic, constant |
| | 2009 EBITA | growth | |
| | US$m | % | currency |
| | | | growth |
| | | | % |
+-------------------------------+------------+-----------+-------------------+
| | | | |
+-------------------------------+------------+-----------+-------------------+
| Latin America | 566 | 19 | 33 |
+-------------------------------+------------+-----------+-------------------+
| Europe | 590 | (19) | 5 |
+-------------------------------+------------+-----------+-------------------+
| North America | 379 | 7 | 7 |
+-------------------------------+------------+-----------+-------------------+
| Africa | 246 | 3 | 15 |
+-------------------------------+------------+-----------+-------------------+
| Asia | 90 | 24 | 29 |
+-------------------------------+------------+-----------+-------------------+
| South Africa: Beverages | 333 | 0 | 4 |
+-------------------------------+------------+-----------+-------------------+
| South Africa: Hotels and | 53 | (12) | (16) |
| Gaming | | | |
+-------------------------------+------------+-----------+-------------------+
| Corporate | (70) | - | - |
+-------------------------------+------------+-----------+-------------------+
| Group | 2,187 | (2) | 11 |
+-------------------------------+------------+-----------+-------------------+
| |
+-------------------------------+------------+-----------+-------------------+
Business review
Our underlying performance has been strong although difficult trading conditions
persisted across most markets. Lager volumes were down 1% on an organic basis,
but our market execution and the strength of our brands enabled us to continue
to gain share across many of our key markets. Group revenue increased by 3%
organically in constant currency, supported by price increases taken
predominantly in the second half of the prior year.
Despite the slight decline in volumes, EBITA performance was strong, growing 11%
on an organic, constant currency basis with the group's EBITA margin improving
110 basis points (bps) to 16.8%. The benefits of falling commodity prices are
not yet fully reflected in our costs, due to the long term nature of our raw
material supply contracts and the relative strength of the US dollar in which
many of these contracts are priced. Greater efficiencies in our marketing spend,
combined with cost reductions and restructuring in certain markets, continued to
benefit our cost base. On a reported basis, EBITA of US$2,187 million declined
2% reflecting significantly weaker operating currencies against the US dollar
compared to the same period in the prior year.
Although reported EBITA was lower, adjusted earnings grew 10% due to lower
finance charges and reduced profit attributable to minority interests following
the purchase of the 28.1% minority interest in our Polish subsidiary Kompania
Piwowarska in May 2009 in exchange for the issue of 60 million ordinary shares.
The group's effective tax rate for the period was 29.4%, compared with 31.0% in
the same period in the prior year.
Free cash flow of US$998 million showed an improvement of
US$1,124 million compared to the same period last year. Capital expenditure was
US$517 million lower than in the prior year period following the completion of
several major investments. Improved working capital management delivered cash
inflow of US$300 million, US$638 million better than in the prior year period.
Normalised EBITDA margin, including both dividends and revenue from MillerCoors,
improved 30 bps during the period.
The group's gearing ratio at 30 September reduced to 47.0% from 54.0% (restated)
at the previous year end. An interim dividend of 17 US cents per share, up 1 US
cent from the prior year, will be paid to shareholders on 11 December 2009.
* In Latin America, despite local currency devaluation, EBITA grew 19% (33% on an
organic, constant currency basis) reflecting strong pricing, principally in the
second half of the prior year, and cost reduction. Lager volumes fell 1% as
economic pressures, combined with political and social unrest in some countries,
impacted beer markets across the region. We continued to focus on expanding the
appeal, availability and affordability of the beer category. In Colombia, lager
volumes were 2% below the prior year period which benefited from increased sales
in September 2008 ahead of a 1 October price increase. Our share of the alcohol
market continued to increase aided by strong performance of our premium brands.
Against prior year comparative growth of 10%, Peru's lager volumes declined 2%,
but market share increased in a market that declined 7%.
* In Europe, lager volumes declined 6% on an organic basis, with depressed
consumer spending leading to a contraction in beer consumption across the
region. With key exchange rates much weaker than last year, EBITA declined 19%
but grew 5% on an organic, constant currency basis. Strong pricing drove
organic, constant currency revenue per hectolitre growth of 6% and further cost
efficiencies more than offset higher depreciation and a 2% increase in variable
production costs. We gained market share in Poland, Romania and the UK, with
strong momentum behind key brands. In the Czech Republic volume share declined
marginally, consistent with our value oriented strategy, and in Russia both
volumes and market share fell, reflecting down-trading in the market and our
focus on the premium segment.
* North America delivered reported EBITA growth of 7% despite lager volumes 5%
below those reported last year. On a pro forma 1 basis, MillerCoors US domestic
volume sales to retailers (STRs) were down 1% for the half year driven by a
slight decline in premium light volumes and continued softness in above premium
and premium brands. Domestic sales to wholesalers (STWs) were down 1% on a pro
forma basis. Strong revenue and cost management, and continued synergy delivery
drove a 22% increase in MillerCoors EBITA on a pro forma basis.
1 MillerCoors pro forma figures are based on results for Miller's and Coors' US
and Puerto Rico operations reported under International Financial Reporting
Standards (IFRS) and US GAAP respectively for the six months ended 30 September
2008. Adjustments have been made to reflect both companies' comparative data on
a similar basis including amortisation of definite-life intangible assets,
depreciation reflecting revisions to property, plant and equipment values and
the exclusion of exceptional items.
* Africa lager volumes grew 3% on an organic basis with Uganda, Zambia and
Mozambique all reporting good growth. However, soft economic conditions
contributed to reduced volumes in Tanzania, and Botswana continued to be
impacted by the 30% social levy on alcoholic beverages imposed in November 2008.
Soft drink volumes grew 5% on an organic basis reflecting robust performance
across the region. EBITA grew 3%, held back by local currency weakness, but
rose 15% on an organic, constant currency basis assisted by firm pricing. We
continue to implement our full beverage portfolio strategy, acquiring a water
business in Ethiopia and a non-alcoholic beverage business in Zambia. New local
premium lager beers were introduced in five markets. Capacity expansion projects
in Uganda and Ghana have recently been completed, as has a new brewery in
Southern Sudan. New plants in Tanzania, Mozambique and Angola will be
commissioned shortly.
* Asia lager volumes grew 9% on an organic basis and organic, constant currency
EBITA grew 29%, while reported EBITA was up 24%. This reflected a strong
performance from CR Snow, our associate in China, which increased lager volumes
by 15% in a market which grew by 6%. Significant share gains were achieved in
the key provinces of Anhui and Zhejiang, driven by the success of the Snow
brand. In Australia, our joint venture enjoyed strong growth in a flat market,
driven by Peroni Nastro Azzurro, Miller Genuine Draft and Bluetongue. India
experienced a difficult first half, with volumes declining 21%, largely as a
result of regulatory issues in the key states of Andhra Pradesh and Uttar
Pradesh.
* Lager volumes in South Africa declined by 3%, impacted by generally weak
consumer spending. As expected, our year on year market share fell. EBITA was
flat due to adverse exchange rates; however on a constant currency basis grew
4%. Group revenue increased by 6% on a constant currency basis, benefiting from
the price increases implemented in the prior year, more than offsetting higher
input costs. Fixed cost savings helped fund a substantial increase in sales and
marketing investment in the beer business, with the core of the lager brand
portfolio strengthened by new advertising campaigns and sponsorship of the
Confederations Football Cup and the Lions rugby tour. Soft drinks volumes were
down 2%, in line with the market. On 1 July, we announced preliminary details
of a proposed broad-based black economic empowerment transaction in South
Africa. This will benefit employees, soft drink and liquor retailers and the
wider South African community by enabling them to participate in the equity of
The South African Breweries Limited.
* The group has begun a major business capability programme that will simplify
processes, reduce costs and allow local management teams to enhance focus on
their markets. Finance, human resources and procurement activities will be
streamlined by deploying global information systems, establishing a global
procurement operation and selectively outsourcing certain activities. Sales,
distribution and supply chain management processes will also be enhanced and
moved onto common, regional systems platforms. The programme is expected to take
four years to complete with spend weighted to the start of the programme.
Exceptional costs of approximately US$370 million will be recognised in the
current year's income statement (US$187 million in the first half) with costs
lowering progressively by approximately 40% year on year in each of the
financial years 2011 to 2013. In addition to non-financial benefits, we
expect cost and efficiency savings rising to approximately US$300 million per
annum by the 2014 financial year and working capital inflows of approximately
US$350 million which will largely be realised in the financial years 2010 to
2012.
Outlook
Overall, we expect the current trading conditions to continue in the second
half, as unemployment, retail spending and other consumer indicators lag the
reported stabilisation of GDP in many of our markets.
Our operational performance continues to be driven by the unique strength of our
local brand portfolios which have enabled market share gains in spite of the
significant price increases taken in the prior year. Price rises will moderate
in the coming months compared with last year. The margin trend delivered in the
first half will be affected over the remainder of the year as the price
increases and cost efficiencies achieved in the prior year are cycled. Input
costs continue to be affected by existing contractual obligations but will begin
to ease towards the end of this year.
We expect second half reported results to benefit from favourable currency
movements, provided our major operating currencies remain at or near current
exchange rates to the US dollar. The group's financial position remains strong
and we are well positioned to take advantage of future improvements in the
market environment.
+-----------+--------------------------------------------------+----------+--------------+
| Enquiries: | | |
+--------------------------------------------------------------+----------+--------------+
| | SABMiller plc | Tel: +44 |
| | | 20 7659 0100 |
+-----------+-------------------------------------------------------------+--------------+
| Sue | Director of Corporate Affairs | Tel: +44 |
| Clark | | 20 7659 0184 |
+-----------+-------------------------------------------------------------+--------------+
| Gary | Senior Vice President, Investor Relations | Tel: +44 |
| Leibowitz | | 20 7659 0119 |
+-----------+-------------------------------------------------------------+--------------+
| Nigel | Head of Media Relations | Mob: +44 |
| Fairbrass | | 7799 894265 |
+-----------+-------------------------------------------------------------+--------------+
| |
+----------------------------------------------------------------------------------------+
| A live audiocast of the management presentation to the investment community will |
| begin at 9.30am (GMT) on 19 November 2009. |
+----------------------------------------------------------------------------------------+
| Access details for this audiocast, video interviews with management and copies of |
| this announcement and the slide presentation are available on the SABMiller plc |
| website at www.sabmiller.com . |
+----------------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------------+
| Images: Our media image library has a large selection of images for use in print |
| and digital media. |
| Visit www.sabmiller.com/imagelibrary |
| Broadcast footage: Our broadcast footage library has stock footage for media |
| organisations to view and download for use in TV programmes or news websites. |
| Visit www.sabmiller.com/broadcastfootage |
| Copies of the press release and detailed Interim Announcement are available from |
| the Company Secretary at the Registered Office, or from 2 Jan Smuts Avenue, |
| Johannesburg, South Africa. |
+-----------+--------------------------------------------------+----------+--------------+
Operational review
Latin America
+--------------------------------------------------+----------+----------+----------+
| Financial summary | 2009 | 2008 | % |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| Group revenue (including share of associates) | 2,746 | 2,848 | (4) |
| (US$m) | | | |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| EBITA* (US$m) | 566 | 474 | 19 |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| EBITA margin (%) | 20.6 | 16.6 | |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| Sales volumes (hl 000) | | | |
+--------------------------------------------------+----------+----------+----------+
| - Lager | 18,053 | 18,260 | (1) |
+--------------------------------------------------+----------+----------+----------+
| - Soft drinks | 7,812 | 9,467 | (17) |
+--------------------------------------------------+----------+----------+----------+
| - Soft drinks (organic) | 7,812 | 7,647 | 2 |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
*In 2009 before net exceptional charges of US$51 million being business
capability programme costs (2008: US$nil).
Latin America delivered very strong EBITA growth in the first half of the year
despite a 1% decline in lager volumes. Volumes were impacted by tough operating
conditions in all markets however we continued to see share gains in Colombia
and Peru, while Ecuador had a particularly strong first half with lager volume
growth of 7%. Soft drinks volumes were 17% lower on a reported basis due to the
disposal of the water business in Colombia and the soft drinks business in
Bolivia in the prior year. On an organic basis, soft drinks grew 2% with good
performance across the Central America markets.
EBITA grew 19%, despite year on year currency weakness, and margin increased 400
basis points. EBITA increased 33% on an organic, constant currency basis
underpinned by pricing benefits, together with fixed cost savings and
reduced marketing spend compared to relatively high expenditure in the same
period last year, which more than offset higher commodity costs.
In Colombia strong pricing in the prior year drove revenue growth of 6% on an
organic, constant currency basis despite a 2% decline in lager volumes. This
decline is a result principally of the benefit in September of the prior year of
increased sales activity ahead of a price increase on 1 October 2008. During
October 2009, this reduction in volume has been largely recovered. Economic
indicators continue to be soft with retail sales figures for the quarter to July
showing a 3.7% contraction. Our share of the alcohol market increased steadily
over the period and was up 330 bps against the prior year at the end of
September reflecting continued strengthening of the appeal of the beer category
to consumers, improving consumption frequency and greater beer affordability.
Despite the economic environment, premium lager volumes grew by 20% in the first
six months of the year boosted by robust growth of Redd's, a brand focused on
the female consumer, and Club Colombia, the local premium brand. In the
mainstream segment, Poker continued its momentum, while Aguila and Aguila Light
increased market share in recent months.
Our Peru operations reported a lager volume decline of 2%, following high growth
in the prior year of 10%. In a market that declined by 7% due to pressure on
disposable income and social conflict in parts of the country during May and
July, our market share grew 420 bps. Our flagship brand, Cristal, continued to
show positive momentum, while strong sales of Cusqueña drove 17% growth in the
premium segment which more than offset a decline in the economy segment
resulting in a favourable mix change. Brand activation continues to focus on
developing consumption occasions while significant investment in direct store
delivery initiatives will aid our market execution further.
Ecuador delivered robust sales growth with a 7% increase in lager volumes. This
performance was supported by growth in consumer disposable income, following an
increase in the minimum wage, combined with improved in-market execution and
brand activation at the point of purchase. Expanded route to market penetration
grew outlet reach by 6% during the period, increasing our customer base by 6,600
new customers. The performance of our premium brand, Club, continues to be
strong with growth of over 50%, following the introduction of a new 550ml pack
in 2009. Our principal mainstream brand, Pilsener, continued to capitalise on
its strong brand equity and increased consumption frequency.
Lager volumes in Panama grew by 2% although market share fell. A decline in our
mainstream brand Atlas was partly offset by strong growth in our Balboa brand
and the doubling of volume in our premium brands.The soft drinks category
delivered strong growth in the period supported by the successful re-launch of
Malta Vigor in a new pack.
In Honduras, total volumes for the first half ended level with the prior year.
In spite of difficult trading conditions, beer share of alcohol increased
substantially during the period. Lager volumes declined by 16% as a result of
curfews and dry laws implemented during the political turmoil, offset by
increased sparkling soft drinks sales as consumers stocked up for home and
family consumption. Our operation continued trading throughout the
disruption in the country.
In El Salvador domestic sparkling soft drinks volumes increased by 7% and we
maintained market share during the period. Lager volumes were level with the
prior year, with a 7% decline in domestic volumes offset by increased
export volumes. Pricing gains and improved lager mix benefited revenue.
Europe
+--------------------------------------------------+----------+----------+----------+
| Financial summary | 2009 | 2008 | % |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| Group revenue (including share of associates) | 3,211 | 4,010 | (20) |
| (US$m) | | | |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| EBITA* (US$m) | 590 | 725 | (19) |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| EBITA margin (%) | 18.4 | 18.1 | |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| Sales volumes (hl 000) | | | |
+--------------------------------------------------+----------+----------+----------+
| - Lager | 27,125 | 28,285 | (4) |
+--------------------------------------------------+----------+----------+----------+
| - Lager (organic) | 26,534 | 28,285 | (6) |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
* In 2009 before net exceptional charges of US$123 million being US$41 million
of integration and restructuring costs and US$82 million of business capability
programme costs (2008: US$10 million being the unwind of fair value adjustments
on inventory following the acquisition of Grolsch).
In Europe, reported lager volumes declined 4% while lager volumes were down 6%
on an organic basis versus the prior year. The beer market continued to
contract across the region as economic conditions depressed consumer spending.
We gained market share in Poland, Romania and the UK with strong momentum behind
key brands. In the Czech Republic, where we continued to pursue a value-focused
strategy, our volume share declined marginally. In Russia, our mainly premium
portfolio has lost volume share as a result of down-trading.
Due to the devaluation of major central and eastern European currencies compared
to the prior year, reported group revenue declined 20% and EBITA declined 19%.
On an organic, constant currency basis, EBITA increased 5% and margin grew 90
basis points due largely to organic, constant currency revenue per hectolitre
growth of 6%, reflecting strong pricing, and cost efficiencies. Marketing
expenditure was lower than the prior year which included sponsorship at a local
level of the Euro 2008 football championships and the Olympics. Fixed costs and
depreciation increased due to expanded reach in Russia and Romania.
In Poland, lager volumes were down 4% in a market which declined 9%. Market
share rose 280 bps driven by strong sales execution, up-weighted distributor and
trade promotional programmes and brand activities centred on Tyskie as sponsor
of the International Year of Beer. Our key mainstream brands performed ahead of
the market. Tyskie, which has enjoyed compounded annual growth of 7% over the
past three years, declined 6%. Zubr captured significant market share with
volumes level with the prior year. The premium portfolio fared slightly better
than the market. In the economy segment, the Wojak brand more than doubled its
volume versus the prior year as distribution was expanded. Revenue per
hectolitre grew 6% reflecting price increases taken in the prior year following
an excise increase. In September 2009 we announced the complete closure of the
Kielce brewery.
Our strategy in the Czech Republic remains focused on core portfolio strength
and value leadership. Domestic lager volumes declined 3%, whilst the market
declined 2% impacted by higher unemployment. The first half of the year was
marked by the launch of PET packs for our two economy brands in response to
competitive activity. The economic slowdown and lower tourism continue to impact
on-premise consumption, however consumption in the off-premise channel was
firmer than in the previous year and we captured share in the expanding
modern-trade. Our premium brands Pilsner Urquell, Frisco and the non-alcoholic
Birell all enjoyed volume growth during the period. In mainstream, Kozel
consolidated its position as Czech's number two brand, behind Gambrinus, and
enjoyed another excellent performance with volume growth of 8%, doing well in
both the on and off-premise channels. Gambrinus 10 continued to decline, but the
higher-priced variant Gambrinus 11 performed strongly.
Domestic revenue per hectolitre growth was 3%, despite negative sales
mix. Efficiency in marketing investment, together with ongoing overhead cost
savings, drove an improvement in constant currency EBITA.
Following strong comparative growth of 24%, lager volumes in Romania fell 12% in
a market that declined 16% impacted severely by the economic crisis. The latest
IMF forecast shows a downward revision to GDP and the Romanian economy is now
expected to contract by 8.5% this year. In this context we continued to grow our
market share, which increased by 140bps over the period. Encouragingly our
mainstream brand, Timisoreana, continued its strong performance, with volume
growth of 1%, notwithstanding comparative growth of 31% in the prior year, and
took significant market share. The on-premise channel declined sharply leading
to a marked decline in premium volumes with the Ursus brand well down despite
gaining share of the segment. The integration of the Azuga business was
completed during the period and we closed its brewery, as planned. A new
campaign to renovate the Azuga economy brand was launched in August. Revenue per
hectolitre is up 10% following above-inflation price increases in the prior year
and pricing taken in July of this year.
In Russia, a sharp decline in consumer disposable income led to an 8% drop in
industry beer production. STRs were down 7%, approximately in line with the
market. Our STW volumes were down 12% reflecting significant trade destocking.
Down-trading is a feature of the market and our super premium and premium
portfolio has therefore been disproportionately affected. Despite this, our
premium value share in Moscow grew 140 bps. On the back of our geographic
expansion strategy, we have launched the Tri Bogatyrya economy brand in a new
PET format leading to growth of almost 60%. This brand mix partially diluted the
strong pricing taken in the prior year but we still achieved revenue per
hectolitre growth of 6%. In May 2009, we opened the new brewery in Ulyanovsk.
In the Ukraine the Sarmat brand has been re-launched and licensed production of
Zolotaya Bochka and Kozel has commenced.
In Italy, economic conditions are still adverse but consumer confidence is
starting to improve. Birra Peroni volumes declined 9% during the period as we
reduced our reliance on promoted volume and focused on value. On a STR basis we
have grown our market share in both volume and value. Profitability improved
through efficiencies in both production and marketing.
Domestic lager volumes in the Netherlands declined 8% and market share was
marginally down. This intensely competitive beer market has resulted in
difficult conditions in the off-premise channel; however recent trends are
positive in the on-premise channel which is now cycling the smoking ban
introduced in July 2008. Restructuring initiatives taken in the prior year are
beginning to show benefits.
In the United Kingdom, lager volumes grew 15% on a like for like basis,
underpinned by Peroni Nastro Azzurro growth of 35%. During the period, exports
of Miller Genuine Draft to Eire were taken over by our UK business following the
termination of the previous licensing arrangement. Our European import
business, which serves Western European markets including Germany, Spain and
France, continued to exhibit strong growth driven by Grolsch and Pilsner
Urquell. In Hungary, Slovakia and the Canaries, economic conditions remain
severe and the beer markets depressed.
North America
+--------------------------------------------------+----------+----------+----------+
| Financial summary | 2009 | 2008 | % |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| Group revenue (including share of joint | 2,870 | 2,9161 | (2) |
| ventures) (US$m) | | | |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| EBITA* (US$m) | 379 | 3551 | 7 |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| EBITA margin (%) | 13.2 | 12.21 | |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| Sales volumes (hl 000) | | | |
+--------------------------------------------------+----------+----------+----------+
| - Lager - excluding contract brewing | 24,116 | 25,2821 | (5) |
+--------------------------------------------------+----------+----------+----------+
| - Soft drinks | 22 | 391 | (42) |
+--------------------------------------------------+----------+----------+----------+
| MillerCoors' volumes | 23,370 | 23,5912 | (1) |
| - Lager - excluding contract brewing | | | |
+--------------------------------------------------+----------+----------+----------+
| - Sales to retailers (STRs) | 23,179 | 23,4192 | (1) |
+--------------------------------------------------+----------+----------+----------+
| - Contract brewing | 2,456 | 2,6032 | (6) |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
* In 2009 before net exceptional charges of US$11 million being the group's
share of MillerCoors' integration and restructuring costs of US$7 million and
the group's share of the unwind of the fair value inventory adjustment of US$4
million (2008: net exceptional credit of US$390 million being US$437
million profit on the deemed disposal of the Miller business and exceptional
costs of US$23 million in relation to the exceptional credit of integration and
restructuring costs for MillerCoors, together with the group's share of
MillerCoors' integration and restructuring costs of US$17 million and the
group's share of the unwind of the fair value inventory adjustment of US$7
million).
1 Volumes, group revenue and EBITA represent 100% of Miller Brewing Company
performance in the first quarter of the half year ended 30 September 2008 and
the group's 58% share of MillerCoors' performance and the retained wholly owned
Miller Brewing Company business (principally Miller Brewing International) for
the balance of the period.
2 MillerCoors pro forma figures are based on results for Miller's and Coors' US
and Puerto Rico operations reported under International Financial Reporting
Standards (IFRS) and US GAAP respectively for the six months ended 30 September
2008. Adjustments have been made to reflect both companies' comparative data on
a similar basis including amortisation of definite-life intangible assets,
depreciation reflecting revisions to property, plant and equipment values and
the exclusion of exceptional items.
Strong revenue and cost management together with continued synergy delivery from
MillerCoors drove EBITA growth of 7% for North America for the half year. Lager
volumes, excluding contract brewing, declined 5%.
MillerCoors
In the six months ended 30 September 2009, MillerCoors US domestic volume STRs
were down 1% on a pro forma2 basis due to a slight decline in premium light
volumes and continued softness in above premium and premium brands. Domestic
STWs fell 1% on a pro forma basis driven by lower retail sales and a reduction
in contract brewing volumes. EBITA grew 22% on a pro forma basis.
Pricing remained strong, with domestic net revenue per hl, excluding contract
brewing and company-owned distributor sales, growing 3% driven by sustained
price increases taken in the second half of the prior year and reduced discount
activity.
Premium light brand volumes (Miller Lite, Coors Light and MGD 64) were down in
low single digits largely due to a decline in Miller Lite, which was partially
offset by MGD 64 growth. Miller Lite STRs were down mid single digits and Coors
Light STRs were in line with the prior year period. MGD 64 continued to perform
well ahead of expectations.
MillerCoors' craft and import portfolio grew slightly during the half, led by
growth of Blue Moon and Peroni Nastro Azzurro. The domestic above-premium
portfolio, which includes Miller Chill, Sparks and Killian's Irish Red,
experienced a double digit decline. The below premium portfolio was up
low single digits, largely due to the strong performance of Keystone Light and
continued growth of Miller High Life, which more than offset declines in
Milwaukee's Best.
Cost of goods sold increased as benefits from MillerCoors' cost leadership
programmes were more than offset by brewing and packaging materials cost
increases under procurement contracts largely arranged prior to the softening in
recent commodity prices.
Marketing, general and administrative costs decreased driven primarily by lower
organisational costs and synergies, partially offset by IT integration-related
expenses.
MillerCoors achieved US$133 million in synergies in the six months to 30
September 2009, largely within marketing and more broadly from the elimination
of duplicate and transitional positions. Network optimisation savings continue
to be realised from shifting production of Coors and Miller brands within the
larger MillerCoors brewery network, a process which will continue for the next
nine months. MillerCoors continued to integrate business processes and systems
across the enterprise to improve customer service and capitalise on the scale of
the business.
MillerCoors has delivered a total of US$211 million in cost savings since
beginning operations on 1 July 2008, and now expects to achieve US$335 million
of cumulative synergies by the end of our current financial year, surpassing its
original commitment of US$312 million. As previously communicated, MillerCoors
will deliver incremental cost savings of US$200 million above its US$500 million
synergy target, and these are expected to be delivered by the end of 2012,
broadly in line with current market expectations. These cost savings include
efficiencies in production costs, procurement, and marketing, general and
administrative expenses.
Africa
+--------------------------------------------------+----------+----------+----------+
| Financial summary | 2009 | 2008 | % |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| Group revenue (including share of associates) | 1,263 | 1,350 | (6) |
| (US$m) | | | |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| EBITA* (US$m) | 246 | 239 | 3 |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| EBITA margin (%) | 19.5 | 17.7 | |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| Sales volumes (hl 000) | | | |
+--------------------------------------------------+----------+----------+----------+
| - Lager | 6,392 | 6,203 | 3 |
+--------------------------------------------------+----------+----------+----------+
| - Lager (organic) | 6,379 | 6,203 | 3 |
+--------------------------------------------------+----------+----------+----------+
| - Soft drinks | 5,037 | 4,084 | 23 |
+--------------------------------------------------+----------+----------+----------+
| - Soft drinks (organic) | 4,275 | 4,084 | 5 |
+--------------------------------------------------+----------+----------+----------+
| - Other alcoholic beverages | 1,978 | 2,091 | (5) |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
*In 2009 before net exceptional costs of US$4 million being business capability
programme costs (2008: US$nil).
Africa's total volumes grew 8% aided by acquisitions in Ghana, Nigeria and
Ethiopia. Lager volumes grew 3% on an organic basis against a backdrop of softer
economic conditions, with good performances in Uganda, Mozambique and Zambia.
Soft drink volumes grew 5% on an organic basis with solid growth across the
region, while other alcoholic beverages declined by 5% following a period of
strong growth in the prior year.
Our strategy of broadening the brand portfolio continued with the introduction
of local premium beer offerings in five markets and the roll out of more
affordable beverages in Tanzania and Mozambique to grow the beer category at the
expense of subsistence alcohol. We also completed the acquisition of a water
business in Ethiopia and a non-alcoholic beverage business in Zambia further
expanding our full beverage portfolio.
Further investments were made at the point of consumption in coolers and outlet
infrastructure to uplift and enliven on-premise drinking occasions. The sales
force has been expanded and service levels have been improved for each class of
trade.
The extensive capacity upgrade project is nearing completion and we have
recently completed projects in Uganda, Southern Sudan and Ghana. New plants in
Tanzania, Mozambique and Angola are due to be commissioned shortly.
EBITA grew 3%, despite adverse currency movements. On an organic, constant
currency basis, EBITA grew 15% and margin improved by 190 basis points on the
same basis, driven by robust pricing and a good performance from our associate
Castel.
In Uganda, lager volumes grew 18% driven by a healthy brand portfolio and
supported by the introduction of the long neck bottle last year and the launch
of Nile Gold as a premium offering in a 330ml returnable bottle. A 20% increase
in brewing capacity was commissioned in June 2009.
Mozambique delivered strong results with lager volume ahead by 7%. Much of this
growth came from the market in the north of the country, justifying our November
commissioning of the greenfield brewery in this region. Strong growth from
Laurentina Preta, a dark lager, and the recently launched Laurentina Premium
further drove performance.
Zambia benefited from a reduction in excise rates at the beginning of the year,
growing lager volumes 23% despite a depressed economy. Soft drinks volumes were
level with the prior year, while traditional beer volumes fell by 2% following
strong growth in the prior year. We concluded the acquisition of the Maheu
business, a traditional maize-based non-alcoholic flavoured drink, in September
2009.
In Tanzania, the economy was impacted more than other African markets by reduced
agricultural exports and lower foreign direct investment, and also suffered from
extreme drought conditions in the northern and central regions. Lager volumes
declined by 6% but market share improved marginally reflecting continued
improvements in sales execution and outlet penetration. During the period, we
successfully re-launched Ndovu Lager in a 375ml green returnable bottle with
enhanced packaging.
The Botswana government implemented a 30% social levy on all alcoholic products
in November 2008. The levy, compounded by an economy impacted by reduced diamond
exports, resulted in sales for the half year declining dramatically, with lager
volumes 47% below the prior year and traditional beer sales down 14%.
Soft drinks volumes grew by 7% during the period.
In Angola total volumes declined 1% for the half year due to a combination of
port congestion, an economic slowdown following a decline in the oil price and
reduced global demand for diamonds and limited availability of foreign currency.
Our planned commissioning of a new beer and a new soft drinks plant in north
Luanda later this year will alleviate some of the adverse impacts of port
congestion by reducing the need to import finished product and the costs
associated with demurrage and port handling.
Castel continued its strong performance with organic lager volume growth of 12%
aided by the commissioning of two new breweries in Angola at the beginning of
the calendar year, and good lager growth from Cameroon. Soft drinks volumes grew
9% with good performances in Tunisia and Algeria.
Asia
+--------------------------------------------------+----------+----------+----------+
| Financial summary | 2009 | 2008 | % |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| Group revenue (including share of associates and | 1,021 | 905 | 13 |
| joint ventures) (US$m) | | | |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| EBITA* (US$m) | 90 | 72 | 24 |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| EBITA margin (%) | 8.8 | 8.0 | |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
| Sales volumes (hl 000) | | | |
+--------------------------------------------------+----------+----------+----------+
| - Lager | 29,229 | 25,981 | 12 |
+--------------------------------------------------+----------+----------+----------+
| - Lager (organic) | 28,343 | 25,981 | 9 |
+--------------------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------------------+----------+----------+----------+
*In 2009 before net exceptional costs of US$1 million being business capability
programme costs (2008: US$nil).
Asia lager volumes grew 9% on an organic basis through good performances from
China, Australia and Vietnam, while India's volumes contracted predominantly due
to regulatory issues. EBITA increased 24% and organic, constant currency EBITA
grew 29% reflecting a strong performance from our associate in China, CR Snow.
Organic, constant currency EBITA margin grew 100 bps to 9.0%.
China's beer industry experienced solid market growth of approximately 6%, and
CR Snow enjoyed volume growth of 15%, well ahead of the market. CR Snow's
national brand, Snow, continued to exploit its national brand positioning which,
together with consistent retail pricing and improved sales execution, drove
further market share gains.
In the northeast, CR Snow continues to lead the market with further volume gains
in the Liaoning and Jilin provinces.Strong growth was reported in the central
region, despite the effects of bad weather and flooding in the second quarter.
Within the central region, significant share gains were achieved in the key
provinces of Anhui and Zhejiang driven by the success of the Snow brand, and
profitability was enhanced by improved cost efficiencies and synergies from
previous acquisitions. The Sichuan area in the west remains a key stronghold
for the business, returning to growth following the earthquake in the prior
year.
India experienced a tough first half year with volumes declining 21% largely as
a result of regulatory issues in the important states of Andhra Pradesh and
Uttar Pradesh. Volumes were further reduced by excise increases in Karnataka
and Rajasthan implemented during the period.
Vietnam, a wholly owned subsidiary from March 2009, continues to build from its
greenfield start, recently launching Miller High Life to support the local Zorok
brand. While still loss making, the business is gaining good growth momentum in
the market place.
Our joint venture in Australia enjoyed strong growth in a stagnant market,
underpinned by growth of Peroni Nastro Azzurro, Miller Genuine Draft and
Bluetongue. The business is currently constructing a greenfield brewery in New
South Wales, to be commissioned next year.
South Africa: Beverages
+---------------------------------------------------+----------+----------+----------+
| Financial summary | 2009 | 2008 | % |
+---------------------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------------------+----------+----------+----------+
| Group revenue (including share of associates) | 2,051 | 2,007 | 2 |
| (US$m) | | | |
+---------------------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------------------+----------+----------+----------+
| EBITA* (US$m) | 333 | 332 | - |
+---------------------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------------------+----------+----------+----------+
| EBITA margin (%) | 16.3 | 16.5 | |
+---------------------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------------------+----------+----------+----------+
| Sales volumes (hl 000) | | | |
+---------------------------------------------------+----------+----------+----------+
| - Lager | 11,973 | 12,307 | (3) |
+---------------------------------------------------+----------+----------+----------+
| - Soft drinks | 7,248 | 7,396 | (2) |
+---------------------------------------------------+----------+----------+----------+
| - Other alcoholic beverages | 594 | 572 | 4 |
+---------------------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------------------+----------+----------+----------+
*In 2009 before net exceptional costs of US$21 million being business capability
programme costs (2008: US$nil).
The South African economy weakened during the period with real gross domestic
product declining by 3% during the second quarter of 2009. Headline inflation
fell considerably from 13% to 6% compared to the same period a year ago, but
retail sales remained under pressure falling by 5% year on year in September.
Lager volumes declined by 3%, impacted by reduced consumer spending. As
expected, our year on year beer market share has declined. Mainstream volumes,
down 2%, performed relatively better supported by strong growth in Castle Lager
and Hansa Pilsener. Carling Black Label continued to be impacted by its
prevalence in the challenging Western Cape liquor market. Within local premium,
Castle Lite returned to growth.Soft drinks volumes were down 2%, in line with
the market. During the period, we grew our share of the sparkling soft drinks
segment through effective market execution, particularly in the top-end grocer
channel.
Group revenue increased by 2% (6% on a constant currency basis), continuing to
benefit from the price increases implemented in the prior year in both the beer
and soft drinks businesses.
Input costs remained under pressure as medium term contractual arrangements with
key brewing raw material suppliers limited the business' ability to benefit from
the downturn in brewing commodity prices. Higher packaging materials and sugar
prices also contributed to increased input costs in the first six months. In
addition, our dollar based input costs were higher than the prior year due to
adverse foreign exchange rates. Distribution costs declined in line with
relatively lower crude oil prices, aided by distribution efficiencies.
Sales and marketing investment increased substantially, focused on our key
brands. Investment in customer facing route to market capability intensified,
with investment in direct distribution and improved service levels to
customers.These additional market facing investments were partly financed
through an intensified productivity and cost reduction programme.
Efforts to enhance and grow the core of the lager brand portfolio saw new
marketing campaigns for Carling Black Label, Castle Lager and Hansa Pilsener,
reinforcing key characteristics of the brands. Castle Lager also benefited from
the recent sponsorship of the Confederations Football Cup championship and
the Lions rugby tour of South Africa. Castle Lite saw growth returning towards
the end of the period supported by its "Extra cold" media campaign and sub-zero
fridge placement in targeted outlets. At the same time, we pursued further
growth in Peroni Nastro Azzurro and established our premium lager portfolio
additions Grolsch and Dreher as longer term contributors.
EBITA was level with the prior year at reported exchange rates, but grew 4% on
an organic, constant currency basis. Margins reduced slightly as price increases
were not sufficient to offset the decline in volumes, continued pressure from
significantly higher input costs and additional market facing investments.
On 1 July, we announced preliminary details of a proposed broad-based black
economic empowerment transaction in South Africa. The transaction is intended
to benefit employees, soft drinks and liquor retailers and the wider South
African community through the formation of The SAB Foundation, by enabling them
to participate in the equity of The South African Breweries Limited. The full
terms of the transaction will be announced in early December 2009.
Distell continued its robust performance with both domestic and international
volumes exhibiting good growth to deliver increased revenue and improved
profitability.
South Africa: Hotels and Gaming
+-----------------------------------------------+----------+----------+----------+
| Financial summary | 2009 | 2008 | % |
+-----------------------------------------------+----------+----------+----------+
| | | | |
+-----------------------------------------------+----------+----------+----------+
| Group revenue (share of associates) (US$m) | 193 | 186 | 3 |
+-----------------------------------------------+----------+----------+----------+
| | | | |
+-----------------------------------------------+----------+----------+----------+
| EBITA* (US$m) | 53 | 61 | (12) |
+-----------------------------------------------+----------+----------+----------+
| | | | |
+-----------------------------------------------+----------+----------+----------+
| EBITA margin (%) | 27.8 | 32.5 | |
+-----------------------------------------------+----------+----------+----------+
| | | | |
+-----------------------------------------------+----------+----------+----------+
| Revenue per available room (Revpar) - US$ | 63.44 | 75.56 | (16) |
+-----------------------------------------------+----------+----------+----------+
| | | | |
+-----------------------------------------------+----------+----------+----------+
* In 2009 before exceptional costs of US$nil (2008: before exceptional charges
of US$9 million in relation to the fair value mark to market losses on financial
instruments).
The group is a 49% shareholder in the Tsogo Sun Group. The half year results
were affected by contraction in the South African economy affecting both the
gaming market and the hospitality and tourism industry.
Our share of Tsogo Sun's reported revenue was US$193 million, an increase of 3%
including the non-organic share of revenue of Tsogo Sun's associated company
Gold Reef Resorts and the newly acquired Century Casinos business. Excluding
this incremental revenue, revenue declined 7% against the prior year.
The gaming industry in South Africa contracted from last year's levels with the
exception of the KwaZulu-Natal region which continued to show growth. Gauteng,
the most significant gaming province, reported a 5% decline in market size
compared to the prior year, with Tsogo Sun's Montecasino, the largest gaming
unit, reporting flat revenue. On 30 June 2009, Tsogo Sun acquired 100% of the
Century Casinos business in Caledon and Newcastle.
The South African hotel industry has been under continued pressure throughout
the first half of the year, particularly in the key corporate and government
market segments. A number of major sporting events in South Africa during the
first quarter of the year including the Indian Premier League cricket
tournament, the Confederations Football Cup championship and the Lions rugby
tour assisted trading. However this was not enough to prevent a 16% decline in
revpar.
EBITA for the division declined 12% for the period and margins were reduced,
impacted by the difficult trading environment.
Financial review
New accounting standards and restatements
The accounting policies followed are the same as those published within the
Annual Report and Accounts for the year ended 31 March 2009 as amended for the
changes set out in note 1, which have had no material impact on group
results. The consolidated balance sheets as at 30 September 2008 and as at 31
March 2009 have been restated for further adjustments relating to initial
accounting for business combinations, further details of which are provided in
note 12. The Annual Report and Accounts for the year ended 31 March
2009 are available on the company's website, www.sabmiller.com.
Segmental analysis
The group's operating results on a segmental basis are set out in the segmental
analysis of operations. The group has adopted IFRS 8 Operating Segments with
effect from 1 April 2009 and this has resulted in a change to the segmental
information reported, with Africa and Asia now reported as separate segments.
Comparative information has been restated accordingly. Additional historical
information for each of the Africa and Asia segments is available on the
company's website.
SABMiller uses group revenue and EBITA (as defined in the Financial Definitions
section) to evaluate performance and believes these measures provide
stakeholders with additional information on trends and allow for greater
comparability between segments. Segmental performance is reported after the
specific apportionment of attributable head office costs.
Disclosure of volumes
In the determination and disclosure of sales volumes, the group aggregates 100%
of the volumes of all consolidated subsidiaries and its equity accounted
percentage of all associates' and joint ventures' volumes. Contract brewing
volumes are excluded from volumes although revenue from contract brewing is
included within group revenue. Volumes exclude intra-group sales volumes.This
measure of volumes is used in the segmental analyses as it more closely aligns
with the consolidated group revenue and EBITA disclosures.
Organic, constant currency comparisons
The group discloses certain results on an organic, constant currency basis, to
show the effects of acquisitions net of disposals and changes in exchange rates
on the group's results. See the Financial Definitions section for the
definition.
In relation to the MillerCoors joint venture no adjustments have been made in
the calculation of organic results as the group's share of the joint venture is
deemed to be comparable with 100% of the Miller business in the comparative
period.
Business combinations and acquisitions
On 10 April 2009 the group assumed control of a 70.56% interest in Bere Azuga in
Romania following receipt of clearance from the competition authorities and has
consolidated Bere Azuga from this date. Subsequently, further share purchases
were made, together with a mandatory public offer for the remainder of shares in
Bere Azuga. As at 30 September 2009, the group had an effective interest of
94.85% in Bere Azuga.
In July 2009 the group completed the acquisition of an effective 40% interest in
Ambo Mineral Water Share Company in Ethiopia.
In September 2009 the group acquired Maheu, a non-alcoholic maize drinks
business, in Zambia.
On 29 May 2009 SABMiller plc acquired the outstanding 28.1% minority interest in
its Polish subsidiary, Kompania Piwowarska SA, in exchange for 60 million
ordinary shares of SABMiller plc.
Exceptional items
Items that are material either by size or incidence are classified as
exceptional items. Further details on the treatment of these items can be found
in note 3 to the financial information.
Net exceptional charges of US$222 million before finance costs and tax were
reported during the period (2008: net exceptional credit of US$371 million)
including net exceptional charges of US$11 million (2008: US$33 million) related
to the group's share of joint ventures' and associates' exceptional charges. The
net exceptional charge included US$170 million related to business capability
programme costs in Latin America, Europe, Africa, Asia, South Africa
Beverages and Corporate, together with a charge of US$41 million related to
integration and restructuring costs in Europe.
The group's share of joint ventures' and associates' exceptional items includes
a charge of US$7 million related to the group's share of MillerCoors'
integration and restructuring costs and US$4 million related to the group's
share of the unwinding of fair value adjustments on inventory in MillerCoors.
In addition there was an exceptional charge in the period of US$17 million
(2008: US$nil) within net finance costs related to the business capability
programme.
In 2008 the net exceptional credit included a US$437 million profit on the
deemed disposal of 42% of the US and Puerto Rico operations of Miller, partly
offset by a charge of US$23 million related to MillerCoors' integration and
restructuring costs and a charge of US$10 million relating to the unwinding of
fair value adjustments on inventory relating to the acquisition of Grolsch. The
group's share of joint ventures' and associates' exceptional items included a
charge of US$17 million relating to its share of MillerCoors' integration and
restructuring costs, US$7 million relating to its share of the unwinding of fair
value adjustments on inventory in MillerCoors and a charge of US$9 million
relating to fair value mark to market losses on financial instruments in Tsogo
Sun.
Finance costs
Net finance costs decreased to US$266 million, a 31% decrease on the prior
period's US$384 million. Finance costs in the current period include a net gain
of US$3 million (2008: net loss of US$26 million) from the mark to market
adjustments of various derivatives on capital items for which hedge accounting
cannot be applied. Finance costs in the period also include a US$17 million
charge resulting from a change in valuation methodology of financial instruments
as part of the business capability programme. The mark to market loss and the
charge resulting from the change in valuation have been excluded from the
determination of adjusted finance costs and adjusted earnings per share.
Adjusted net finance costs were US$253 million, down 29% reflecting the
reduction in the weighted average interest rate due to the lower global interest
rate environment.
Interest cover, as defined in the Financial Definitions section, has increased
to 9.1 times from 6.8 times in the comparable prior year period.
Profit before tax
Adjusted profit before tax of US$1,920 million increased by 3% over the
comparable period in the prior year, benefiting from lower net finance costs.
On a statutory basis, profit before tax of US$1,498 million was down 26%
including the impact of the exceptional and other adjusting finance items noted
above. The principal differences relate to exceptional items with net
exceptional charges of US$239 million in the half year compared to net
exceptional credits of US$371 million in the prior period.
Taxation
The effective tax rate of 29.4% before amortisation of intangible assets (other
than software), exceptional items and the adjustments to finance costs noted
above, is below that of the prior year (31.0%). The rate has fallen principally
as a result of beneficial changes in the combination of geographic profits, but
also through ongoing management of the effective tax rate.
Earnings per share
The group presents adjusted basic earnings per share to exclude the impact of
amortisation of intangible assets (other than software) and other non-recurring
items, which include post-tax exceptional items, in order to present a more
meaningful comparison for the periods shown in the consolidated financial
information. Adjusted basic earnings per share of 80.0 US cents were up 6% on
the comparable period in the prior year, benefiting from lower finance costs and
taxation as discussed above together with lower profit attributable to minority
interests, partially offset by an increase in the weighted average number of
shares in issue. The reduction in profit attributable to minority interests and
the increase in shares in issue result from the buyout of the minority interests
in our Polish business. An analysis of earnings per share is shown in note 5.
On a statutory basis, basic earnings per share are 34% lower at 63.0 US cents.
Cash flow
Net cash generated from operations before working capital movements (EBITDA)
decreased by 21% to US$1,865 million compared to the prior year period. This
decrease was primarily due to the reduction in EBITDA from North America
following the formation of the MillerCoors joint venture, as EBITDA excludes
cash flows from associates and joint ventures. Dividends received from the
MillerCoors joint venture (reported within cash flows from investing activities)
amounted to US$427 million (2008: US$81 million). EBITDA together with the
MillerCoors dividends decreased by 6% on the same period in the prior year,
primarily due to expenditure on the business capability programme and the impact
of the strength of the US dollar on translated results. Net cash generated from
operating activities of US$1,499 million was up 27% reflecting a significant
improvement in working capital, together with lower tax and net interest
payments partly offset by the reduction in EBITDA. The working capital
improvement compared to the same period last year reflects changes in process
management practices applied to inventory, receivables and payables, resulting
in net working capital inflows in most major operations.Free cash flow improved
by US$1,124 million to US$998 million, as detailed in note 9b.
Capital expenditure
The group has continued to invest in its operations, selectively maintaining
investment to support future growth, including new breweries in Russia, Angola,
Tanzania, Southern Sudan and Mozambique together with recently completed
capacity expansions in Poland, Romania, Ghana and Uganda. Capital expenditure
for the six months to 30 September 2009 was US$728 million (2008 US$1,245
million). With effect from 1 July 2008, the capital expenditure for the
MillerCoors joint venture has been excluded from the consolidated capital
expenditure reported.
Capital expenditure including the purchase of intangible assets was US$739
million (2008: US$1,279 million).
Borrowings and net debt
Gross debt at 30 September 2009, comprising borrowings together with the fair
value of derivative assets or liabilities held to manage interest rate and
foreign currency risk of borrowings, has increased to US$9,809 million from
US$9,131 million at 31 March 2009, primarily as result of the impact of exchange
rates on the retranslation of the group's Colombian peso and euro denominated
debt. Net debt comprising gross debt net of cash and cash equivalents has
increased to US$9,345 million from US$8,709 million (restated) at 31 March
2009. An analysis of net debt is provided in note 9c.
The group's gearing (presented as a ratio of net debt/equity) has decreased to
47.0% from 54.0% (restated) at 31 March 2009. The weighted average interest rate
for the gross debt portfolio at 30 September 2009 was 6.0% (31 March 2009:
7.1%).
On 1 July 2009 the US$300 million LIBOR +0.3% Notes issued by SABMiller plc
matured and were refinanced from existing facilities. On 17 July 2009 SABMiller
plc completed a EUR1,000 million bond issue which was issued under the US$5,000
million Euro Medium Term Note Programme. The notes were issued in a single
tranche of 5.5 year notes with a coupon of 4.5%. The net proceeds of the bond
have been used to repay certain indebtedness.
Subsequent to 30 September 2009 the US$1,000 million 364 day facility was
voluntarily cancelled in part, reducing the size of the facility to US$600
million. The facility was subsequently extended from October 2009 to 6 October
2010 in the amount of US$515 million, with a one year term out option.
Total equity
Total equity increased from US$16,117 million (as restated) at 31 March 2009 to
US$19,880 million at 30 September 2009. The increase is principally due to
currency translation movements on foreign currency investments, profit for the
period and the issue of shares for the Polish minority buyout, partly offset by
fair value moves on hedged items and dividend payments.
Goodwill and intangible assets
Goodwill has increased to US$11,608 million (31 March 2009: US$8,715 million)
primarily due to foreign exchange movements and goodwill on acquisitions in the
period, including the Polish minority buyout. Intangible assets have increased
in the period to US$4,369 million (31 March 2009: US$3,741 million) as a result
of foreign exchange movements partially offset by amortisation. The comparatives
for both goodwill and intangible assets have been restated to reflect
adjustments to provisional fair values of business combinations, further details
of which are provided in note 12.
Currencies
The rand appreciated by 27% against the US dollar during the six months to 30
September 2009 and ended the period at R7.55 to the US dollar, while the
weighted average rand/dollar rate weakened by 4% to R8.12 compared with R7.79 in
the comparable period. The Colombian peso (COP) strengthened by 33% against the
US dollar during the six months and ended the period at COP1,922 to the US
dollar compared with COP2,561 at 31 March 2009. The weighted average COP/dollar
rate weakened by 14% to COP2,113 compared with COP1,827 in the comparable
period.
Risks and uncertainties
The principal risks and uncertainties for the first six months and remaining six
months of the financial year remain as reflected on page 10 of the 2009 Annual
Report. These are summarised as follows:
The risk that, as the industry consolidates, failure to participate in
attractive value-adding transactions may inhibit the group's ability to grow and
exploit scale benefits. There is also a risk that expected benefits from
participating in consolidation and integrating acquisitions may not be captured
or may be inadequate, or that the group may not fully leverage its scale across
business operations.
The risk that opportunities for profitable growth may not be realised should the
group fail to ensure the relevance and attractiveness of its brands, and
continuously improve its marketing and related sales capability.
The risk that the group's global growth potential may be jeopardised due to a
failure to develop and maintain a sufficient cadre of talented management or to
capture shared learnings and leverage expertise through effective management
practices.
The risk that regulatory authorities when making impositions on beer do not
recognise the positive contribution of the group's businesses, and effective
ways of addressing health and social concerns. In affected countries the group's
ability to grow profitably and contribute to local communities could be
adversely affected.
The risk that margins could fall because the group fails to ensure an adequate
supply of brewing and packaging raw materials at competitive prices.
The risk that the group's plans and responses to changes in global economic
conditions may not be adequate.
Dividend
The board has declared a cash interim dividend of 17 US cents per share, an
increase of 6%. The dividend will be payable on Friday 11 December 2009 to
shareholders registered on the London and Johannesburg registers on Friday 4
December 2009. The ex-dividend trading dates will be Wednesday 2 December 2009
on the London Stock Exchange (LSE) and Monday 30 November 2009 on the JSE
Limited (JSE). As the group reports in US dollars, dividends are declared in US
dollars. They are payable in South African rand to shareholders on the
Johannesburg register, in US dollars to shareholders on the London register with
a registered address in the United States (unless mandated otherwise), and in
sterling to all remaining shareholders on the London register. Further details
relating to dividends are provided in note 6.
The rate of exchange applicable for US dollar conversion into South African rand
and sterling was determined yesterday. The rate of exchange determined for
converting to South African rand was US$:ZAR 7.41400 resulting in an equivalent
interim dividend of 126.038 SA cents per share. The rate of exchange determined
for converting to sterling was GBP:US$1.6799 resulting in an equivalent interim
dividend of 10.1197 UK pence per share.
From the commencement of trading on Thursday 19 November 2009 until the close of
business on Friday 4 December 2009, no transfers between the London and
Johannesburg registers will be permitted, and from Monday 30 November 2009 until
Friday 4 December 2009, no shares may be dematerialised or rematerialised, both
days inclusive.
Directors' responsibility for financial reporting
This statement, which should be read in conjunction with the independent review
report of the auditors set out below, is made to enable shareholders to
distinguish the respective responsibilities of the directors and the auditors in
relation to the consolidated interim financial information which the directors
confirm has been prepared on a going concern basis. The directors consider that
the group has used appropriate accounting policies, consistently applied and
supported by reasonable and appropriate judgements and estimates.
A copy of the interim report of the group is placed on the company's website.
The directors are responsible for the maintenance and integrity of the statutory
and audited information on the company's website. Information published on the
internet is accessible in many countries with different legal requirements.
Legislation in the United Kingdom governing the preparation and dissemination of
the financial statements may differ from legislation in other jurisdictions.
The directors confirm that this condensed set of interim financial information
has been prepared in accordance with IAS 34 as adopted by the European Union,
and the interim management report herein includes a fair review of the
information required by DTR 4.2.7 and DTR 4.2.8 of the Disclosure and
Transparency Rules of the United Kingdom's Financial Services Authority.
The directors of SABMiller plc are listed in the SABMiller plc Annual Report for
the year ended 31 March 2009. Howard Willard was appointed to the board with
effect from 1 August 2009. A list of current directors is maintained on the
SABMiller plc website: www.sabmiller.com.
On behalf of the board
EAG Mackay MI Wyman
Chief executive Chief financial officer
19 November 2009
+---------------------------------------------------------------------------+---------------+
| INDEPENDENT REVIEW REPORT OF HALF-YEARLY CONSOLIDATED FINANCIAL INFORMATION TO SABMILLER |
| PLC |
+-------------------------------------------------------------------------------------------+
| | |
+---------------------------------------------------------------------------+---------------+
Introduction
We have been engaged by the company to review the condensed set of financial
information in the half-yearly financial report for the six months ended 30
September 2009, which comprises the consolidated income statement, consolidated
statement of comprehensive income, consolidated balance sheet, consolidated cash
flow statement, consolidated statement of changes in equity and related notes.
We have read the other information contained in the half yearly financial report
and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
information.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with IFRS as adopted by the European Union. The condensed
set of financial information included in this half-yearly financial report has
been prepared in accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial information in the half-yearly financial report based on our
review. This report, including the conclusion, has been prepared for and only
for the company for the purpose of the Disclosure and Transparency Rules of the
Financial Services Authority and for no other purpose. We do not, in producing
this report, accept or assume responsibility for any other purpose or to any
other person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial information in the half-yearly financial
report for the six months ended 30 September 2009 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
London
19 November 2009
+-------------------------------------------------+-----------------------------------------+
| SABMiller plc | |
+-------------------------------------------------+-----------------------------------------+
| CONSOLIDATED INCOME STATEMENT | |
+-------------------------------------------------+-----------------------------------------+
| for the six months ended 30 September | |
+-------------------------------------------------+-----------------------------------------+
+--------------------------------------------+-------+------------+-----------+----------+
| |Notes | Six months | Six | Year |
| | | ended | months | ended |
| | | 30/9/09 | ended | 31/3/09 |
| | | Unaudited | 30/9/08 | Audited |
| | | US$m | Unaudited | US$m |
| | | | US$m | |
+--------------------------------------------+-------+------------+-----------+----------+
| | | | | |
+--------------------------------------------+-------+------------+-----------+----------+
| Revenue | 2 | 8,846 | 11,166 | 18,703 |
+--------------------------------------------+-------+------------+-----------+----------+
| Net operating expenses | | (7,632) | (9,011) | (15,555) |
+--------------------------------------------+-------+------------+-----------+----------+
| | | | | |
+--------------------------------------------+-------+------------+-----------+----------+
| Operating profit | 2 | 1,214 | 2,155 | 3,148 |
+--------------------------------------------+-------+------------+-----------+----------+
| Operating profit before exceptional items | | 1,425 | 1,751 | 3,146 |
+--------------------------------------------+-------+------------+-----------+----------+
| Exceptional items | 3 | (211) | 404 | 2 |
+--------------------------------------------+-------+------------+-----------+----------+
| | | | | |
+--------------------------------------------+-------+------------+-----------+----------+
| Net finance costs | | (266) | (384) | (706) |
+--------------------------------------------+-------+------------+-----------+----------+
| Interest payable and similar charges | | (425) | (654) | (1,301) |
+--------------------------------------------+-------+------------+-----------+----------+
| Interest receivable and similar income | | 159 | 270 | 595 |
+--------------------------------------------+-------+------------+-----------+----------+
| | | | | |
+--------------------------------------------+-------+------------+-----------+----------+
| Share of post-tax results of associates | 2 | 550 | 249 | 516 |
| and joint ventures | | | | |
+--------------------------------------------+-------+------------+-----------+----------+
| | | | | |
+--------------------------------------------+-------+------------+-----------+----------+
| Profit before taxation | | 1,498 | 2,020 | 2,958 |
+--------------------------------------------+-------+------------+-----------+----------+
| Taxation | 4 | (436) | (455) | (801) |
+--------------------------------------------+-------+------------+-----------+----------+
| | | | | |
+--------------------------------------------+-------+------------+-----------+----------+
| Profit for the financial period | | 1,062 | 1,565 | 2,157 |
+--------------------------------------------+-------+------------+-----------+----------+
| | | | | |
+--------------------------------------------+-------+------------+-----------+----------+
| Profit attributable to minority interests | | 89 | 142 | 276 |
+--------------------------------------------+-------+------------+-----------+----------+
| Profit attributable to equity shareholders | 5 | 973 | 1,423 | 1,881 |
| | | | | |
+--------------------------------------------+-------+------------+-----------+----------+
| | | 1,062 | 1,565 | 2,157 |
+--------------------------------------------+-------+------------+-----------+----------+
| | | | | |
+--------------------------------------------+-------+------------+-----------+----------+
| | | | | |
+--------------------------------------------+-------+------------+-----------+----------+
| Basic earnings per share (US cents) | 5 | 63.0 | 94.8 | 125.2 |
+--------------------------------------------+-------+------------+-----------+----------+
| Diluted earnings per share (US cents) | 5 | 62.6 | 94.3 | 124.6 |
+--------------------------------------------+-------+------------+-----------+----------+
| | | | | |
+--------------------------------------------+-------+------------+-----------+----------+
All operations are continuing.
The notes form an integral part of this condensed interim financial information.
+-------------------------------------------------+-----------------------------------------+
| SABMiller plc | |
+-------------------------------------------------+-----------------------------------------+
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
+-------------------------------------------------------------------------------------------+
| for the six months ended 30 September | |
+-------------------------------------------------+-----------------------------------------+
+------------------------------------------------------+------------+-----------+-----------+
| | Six months | Six | Year |
| | ended | months | ended |
| | 30/9/09 | ended | 31/3/09 |
| | Unaudited | 30/9/08 | Unaudited |
| | US$m | Unaudited | US$m |
| | | US$m | |
+------------------------------------------------------+------------+-----------+-----------+
| | | | |
+------------------------------------------------------+------------+-----------+-----------+
| Profit for the period | 1,062 | 1,565 | 2,157 |
+------------------------------------------------------+------------+-----------+-----------+
| Other comprehensive income: | | | |
+------------------------------------------------------+------------+-----------+-----------+
| Currency translation differences on foreign currency | 2,590 | (1,587) | (3,385) |
| net investments | | | |
+------------------------------------------------------+------------+-----------+-----------+
| | | | |
+------------------------------------------------------+------------+-----------+-----------+
| Actuarial losses on defined benefit plans | - | (37) | (18) |
+------------------------------------------------------+------------+-----------+-----------+
| | | | |
+------------------------------------------------------+------------+-----------+-----------+
| Available for sale investments: | | | |
+------------------------------------------------------+------------+-----------+-----------+
| - Fair value gains/(losses) arising during the | 2 | (3) | (8) |
| period | | | |
+------------------------------------------------------+------------+-----------+-----------+
| | | | |
+------------------------------------------------------+------------+-----------+-----------+
| Net investment hedges: | | | |
+------------------------------------------------------+------------+-----------+-----------+
| - Fair value (losses)/gains arising during the | (367) | 112 | 337 |
| period | | | |
+------------------------------------------------------+------------+-----------+-----------+
| | | | |
+------------------------------------------------------+------------+-----------+-----------+
| Cash flow hedges: | (46) | 20 | 28 |
+------------------------------------------------------+------------+-----------+-----------+
| - Fair value (losses)/gains arising during the | (47) | 25 | 24 |
| period | | | |
+------------------------------------------------------+------------+-----------+-----------+
| - Reclassification adjustment for gains/(losses) | 1 | (5) | 4 |
| included in profit or loss | | | |
+------------------------------------------------------+------------+-----------+-----------+
| | | | |
+------------------------------------------------------+------------+-----------+-----------+
| Tax on items included in other comprehensive income: | (26) | 10 | 125 |
+------------------------------------------------------+------------+-----------+-----------+
| - Tax on cash flow hedges | (26) | (4) | 31 |
+------------------------------------------------------+------------+-----------+-----------+
| - Tax on actuarial losses on defined benefit plans | - | 14 | 94 |
+------------------------------------------------------+------------+-----------+-----------+
| | | | |
+------------------------------------------------------+------------+-----------+-----------+
| Share of associates' and joint ventures' | 85 | (38) | (330) |
| gains/(losses) included in other comprehensive | | | |
| income | | | |
+------------------------------------------------------+------------+-----------+-----------+
| Total comprehensive income for the period, net of | 3,300 | 42 | (1,094) |
| tax | | | |
+------------------------------------------------------+------------+-----------+-----------+
| - attributable to equity shareholders | 3,222 | (89) | (1,345) |
+------------------------------------------------------+------------+-----------+-----------+
| - attributable to minority interests | 78 | 131 | 251 |
+------------------------------------------------------+------------+-----------+-----------+
The notes form an integral part of this condensed interim financial information.
+-------------------------------------------------+-----------------------------------------+
| SABMiller plc | |
+-------------------------------------------------+-----------------------------------------+
| CONSOLIDATED BALANCE SHEET | |
+-------------------------------------------------+-----------------------------------------+
| at 30 September | |
+-------------------------------------------------+-----------------------------------------+
+------------------------------------------+--------+------------+-----------+-----------+
| | Notes | 30/9/09 | 30/9/08* | 31/3/09* |
| | | Unaudited | Unaudited | Unaudited |
| | | US$m | US$m | US$m |
+------------------------------------------+--------+------------+-----------+-----------+
| Assets | | | | |
+------------------------------------------+--------+------------+-----------+-----------+
| Non-current assets | | | | |
+------------------------------------------+--------+------------+-----------+-----------+
| Goodwill | 7 | 11,608 | 10,067 | 8,715 |
+------------------------------------------+--------+------------+-----------+-----------+
| Intangible assets | 7 | 4,369 | 4,217 | 3,741 |
+------------------------------------------+--------+------------+-----------+-----------+
| Property, plant and equipment | 8 | 8,883 | 8,064 | 7,404 |
+------------------------------------------+--------+------------+-----------+-----------+
| Investments in joint ventures | | 5,638 | 5,812 | 5,495 |
+------------------------------------------+--------+------------+-----------+-----------+
| Investments in associates | | 2,136 | 1,765 | 1,787 |
+------------------------------------------+--------+------------+-----------+-----------+
| Available for sale investments | | 34 | 35 | 29 |
+------------------------------------------+--------+------------+-----------+-----------+
| Derivative financial instruments | | 413 | 294 | 695 |
+------------------------------------------+--------+------------+-----------+-----------+
| Trade and other receivables | | 155 | 124 | 125 |
+------------------------------------------+--------+------------+-----------+-----------+
| Deferred tax assets | | 175 | 185 | 161 |
+------------------------------------------+--------+------------+-----------+-----------+
| | | 33,411 | 30,563 | 28,152 |
+------------------------------------------+--------+------------+-----------+-----------+
| Current assets | | | | |
+------------------------------------------+--------+------------+-----------+-----------+
| Inventories | | 1,424 | 1,299 | 1,241 |
+------------------------------------------+--------+------------+-----------+-----------+
| Trade and other receivables | | 1,711 | 1,752 | 1,576 |
+------------------------------------------+--------+------------+-----------+-----------+
| Current tax assets | | 143 | 152 | 168 |
+------------------------------------------+--------+------------+-----------+-----------+
| Derivative financial instruments | | 12 | 45 | 54 |
+------------------------------------------+--------+------------+-----------+-----------+
| Available for sale investments | | - | - | 11 |
+------------------------------------------+--------+------------+-----------+-----------+
| Cash and cash equivalents | 9c | 464 | 350 | 422 |
+------------------------------------------+--------+------------+-----------+-----------+
| | | 3,754 | 3,598 | 3,472 |
+------------------------------------------+--------+------------+-----------+-----------+
| Total assets | | 37,165 | 34,161 | 31,624 |
+------------------------------------------+--------+------------+-----------+-----------+
| | | | | |
+------------------------------------------+--------+------------+-----------+-----------+
| Liabilities | | | | |
+------------------------------------------+--------+------------+-----------+-----------+
| Current liabilities | | | | |
+------------------------------------------+--------+------------+-----------+-----------+
| Derivative financial instruments | | (128) | (45) | (35) |
+------------------------------------------+--------+------------+-----------+-----------+
| Borrowings | 9c | (1,172) | (1,569) | (2,148) |
+------------------------------------------+--------+------------+-----------+-----------+
| Trade and other payables | | (3,040) | (2,694) | (2,397) |
+------------------------------------------+--------+------------+-----------+-----------+
| Current tax liabilities | | (561) | (545) | (463) |
+------------------------------------------+--------+------------+-----------+-----------+
| Provisions | | (313) | (276) | (299) |
+------------------------------------------+--------+------------+-----------+-----------+
| | | (5,214) | (5,129) | (5,342) |
+------------------------------------------+--------+------------+-----------+-----------+
| Non-current liabilities | | | | |
+------------------------------------------+--------+------------+-----------+-----------+
| Derivative financial instruments | | (212) | (302) | (107) |
+------------------------------------------+--------+------------+-----------+-----------+
| Borrowings | 9c | (8,844) | (8,255) | (7,470) |
+------------------------------------------+--------+------------+-----------+-----------+
| Trade and other payables | | (235) | (243) | (186) |
+------------------------------------------+--------+------------+-----------+-----------+
| Deferred tax liabilities | | (2,321) | (2,251) | (2,029) |
+------------------------------------------+--------+------------+-----------+-----------+
| Provisions | | (459) | (452) | (373) |
+------------------------------------------+--------+------------+-----------+-----------+
| | | (12,071) | (11,503) | (10,165) |
+------------------------------------------+--------+------------+-----------+-----------+
| Total liabilities | | (17,285) | (16,632) | (15,507) |
+------------------------------------------+--------+------------+-----------+-----------+
| | | | | |
+------------------------------------------+--------+------------+-----------+-----------+
| Net assets | | 19,880 | 17,529 | 16,117 |
+------------------------------------------+--------+------------+-----------+-----------+
| | | | | |
+------------------------------------------+--------+------------+-----------+-----------+
| Equity | | | | |
+------------------------------------------+--------+------------+-----------+-----------+
| Share capital | | 165 | 158 | 159 |
+------------------------------------------+--------+------------+-----------+-----------+
| Share premium | | 6,255 | 6,192 | 6,198 |
+------------------------------------------+--------+------------+-----------+-----------+
| Merger relief reserve | | 4,586 | 3,395 | 3,395 |
+------------------------------------------+--------+------------+-----------+-----------+
| Other reserves | | 1,377 | 713 | (872) |
+------------------------------------------+--------+------------+-----------+-----------+
| Retained earnings | | 6,831 | 6,386 | 6,496 |
+------------------------------------------+--------+------------+-----------+-----------+
| Total shareholders' equity | | 19,214 | 16,844 | 15,376 |
+------------------------------------------+--------+------------+-----------+-----------+
| Minority interests | | 666 | 685 | 741 |
+------------------------------------------+--------+------------+-----------+-----------+
| Total equity | | 19,880 | 17,529 | 16,117 |
+------------------------------------------+--------+------------+-----------+-----------+
* As restated (see note 12).
The notes form an integral part of this condensed financial information.
+-------------------------------------------------+-----------------------------------------+
| SABMiller plc | |
+-------------------------------------------------+-----------------------------------------+
| CONSOLIDATED CASH FLOW STATEMENT | |
+-------------------------------------------------+-----------------------------------------+
| for the six months ended 30 September | |
+-------------------------------------------------+-----------------------------------------+
+------------------------------------------+-------+------------+------------+-------------+
| |Notes | Six months | Six months | Year |
| | | ended | ended | ended |
| | | 30/9/09 | 30/9/08* | 31/3/09* |
| | | Unaudited | Unaudited | Unaudited |
| | | US$m | US$m | US$m |
+------------------------------------------+-------+------------+------------+-------------+
| | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Cash flows from operating activities | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Cash generated from operations | 9a | 2,165 | 2,017 | 3,671 |
+------------------------------------------+-------+------------+------------+-------------+
| Interest received | | 170 | 122 | 275 |
+------------------------------------------+-------+------------+------------+-------------+
| Interest paid | | (499) | (511) | (997) |
+------------------------------------------+-------+------------+------------+-------------+
| Tax paid | | (337) | (450) | (766) |
+------------------------------------------+-------+------------+------------+-------------+
| Net cash from operating activities | 9b | 1,499 | 1,178 | 2,183 |
+------------------------------------------+-------+------------+------------+-------------+
| | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Cash flows from investing activities | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Purchase of property, plant and | | (728) | (1,245) | (2,073) |
| equipment | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Proceeds from sale of property, plant | | 20 | 22 | 75 |
| and equipment | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Purchase of intangible assets | | (11) | (34) | (74) |
+------------------------------------------+-------+------------+------------+-------------+
| Purchase of available for sale | | - | - | (14) |
| investments | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Proceeds from disposal of available for | | 2 | 1 | 4 |
| sale investments | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Proceeds from disposal of businesses | | - | - | 119 |
+------------------------------------------+-------+------------+------------+-------------+
| Acquisition of businesses (net of cash | | (30) | (184) | (252) |
| acquired) | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Overdraft disposed with businesses | | - | 2 | 2 |
+------------------------------------------+-------+------------+------------+-------------+
| Cash disposed with businesses | | - | - | (4) |
+------------------------------------------+-------+------------+------------+-------------+
| Purchase of shares from minorities | | (3) | (2) | (5) |
+------------------------------------------+-------+------------+------------+-------------+
| Investments in joint ventures | | (142) | (123) | (397) |
+------------------------------------------+-------+------------+------------+-------------+
| Investments in associates | | (9) | (5) | (4) |
+------------------------------------------+-------+------------+------------+-------------+
| Repayment of investments by associates | | - | - | 3 |
+------------------------------------------+-------+------------+------------+-------------+
| Dividends received from joint ventures | | 427 | 81 | 454 |
+------------------------------------------+-------+------------+------------+-------------+
| Dividends received from associates | | 39 | 119 | 151 |
+------------------------------------------+-------+------------+------------+-------------+
| Dividends received from other | | 1 | 1 | 1 |
| investments | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Net cash used in investing activities | | (434) | (1,367) | (2,014) |
+------------------------------------------+-------+------------+------------+-------------+
| | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Cash flows from financing activities | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Proceeds from the issue of shares | | 57 | 16 | 23 |
+------------------------------------------+-------+------------+------------+-------------+
| Purchase of own shares for share trusts | | (8) | (26) | (37) |
+------------------------------------------+-------+------------+------------+-------------+
| Proceeds from borrowings | | 3,623 | 2,466 | 4,960 |
+------------------------------------------+-------+------------+------------+-------------+
| Repayment of borrowings | | (3,857) | (1,802) | (4,096) |
+------------------------------------------+-------+------------+------------+-------------+
| Net repayment of capital element of | | (1) | (3) | (1) |
| finance leases | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Net cash payments on net investment | | (109) | (24) | (12) |
| hedges | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Dividends paid to shareholders of the | | (654) | (640) | (877) |
| parent | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Dividends paid to minority interests | | (95) | (118) | (217) |
+------------------------------------------+-------+------------+------------+-------------+
| Net cash used in financing activities | | (1,044) | (131) | (257) |
+------------------------------------------+-------+------------+------------+-------------+
| | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Net cash from operating, investing and | | 21 | (320) | (88) |
| financing activities | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Effects of exchange rate changes | | 56 | 83 | 22 |
+------------------------------------------+-------+------------+------------+-------------+
| Net increase/(decrease) in cash and cash | | 77 | (237) | (66) |
| equivalents | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| Cash and cash equivalents at 1 April | 9c | 122 | 188 | 188 |
+------------------------------------------+-------+------------+------------+-------------+
| Cash and cash equivalents at end of | 9c | 199 | (49) | 122 |
| period | | | | |
+------------------------------------------+-------+------------+------------+-------------+
| | | | | |
+------------------------------------------+-------+------------+------------+-------------+
* As restated (see note 12).
The notes form an integral part of this condensed financial information.
+-------------------------------------------------+-----+------------------------------------+
| SABMiller plc | |
+-------------------------------------------------+------------------------------------------+
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | |
+-------------------------------------------------------+------------------------------------+
| for the six months ended 30 September | |
+-------------------------------------------------+-----+------------------------------------+
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| | Called | Share | Other | Retained | Total | Minority | Total |
| | up | premium | reserves | earnings | shareholders' | interests | equity |
| | share | account | | | equity | | |
| | capital | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| | US$m | US$m | US$m | US$m | US$m | US$m | US$m |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| At 1 April 2008 (audited) | 158 | 6,176 | 5,610 | 5,601 | 17,545 | 699 | 18,244 |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Total comprehensive income | - | - | (1,499) | 1,410 | (89) | 131 | 42 |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Profit for the period | - | - | - | 1,423 | 1,423 | 142 | 1,565 |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Other comprehensive income | - | - | (1,499) | (13) | (1,512) | (11) | (1,523) |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Other movements | - | - | 4 | 2 | 6 | - | 6 |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Contributed to joint ventures | - | - | (7) | - | (7) | (2) | (9) |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Dividends paid | - | - | - | (640) | (640) | (143) | (783) |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Issue of SABMiller plc ordinary | - | 16 | - | - | 16 | - | 16 |
| shares | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Payment for purchase of own shares | - | - | - | (26) | (26) | - | (26) |
| for share trusts | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Credit entry relating to share-based | - | - | - | 39 | 39 | - | 39 |
| payments | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| At 30 September 2008* (unaudited) | 158 | 6,192 | 4,108 | 6,386 | 16,844 | 685 | 17,529 |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| At 1 April 2008 (audited) | 158 | 6,176 | 5,610 | 5,601 | 17,545 | 699 | 18,244 |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Total comprehensive income | - | - | (3,080) | 1,735 | (1,345) | 251 | (1,094) |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Profit for the period | - | - | - | 1,881 | 1,881 | 276 | 2,157 |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Other comprehensive income | - | - | (3,080) | (146) | (3,226) | (25) | (3,251) |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Other movements | - | - | - | (5) | (5) | - | (5) |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Contributed to joint ventures | - | - | (7) | - | (7) | (2) | (9) |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Dividends paid | - | - | - | (877) | (877) | (221) | (1,098) |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Issue of SABMiller plc ordinary | 1 | 22 | - | - | 23 | - | 23 |
| shares | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Payment for purchase of own shares | - | - | - | (37) | (37) | - | (37) |
| for share trusts | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Arising on business combinations | - | - | - | - | - | 17 | 17 |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Buyout of minority interests | - | - | - | - | - | (3) | (3) |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Credit entry relating to share-based | - | - | - | 79 | 79 | - | 79 |
| payments | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| At 31 March 2009* (unaudited) | 159 | 6,198 | 2,523 | 6,496 | 15,376 | 741 | 16,117 |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| At 1 April 2009 (unaudited) | 159 | 6,198 | 2,523 | 6,496 | 15,376 | 741 | 16,117 |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Total comprehensive income | - | - | 2,249 | 973 | 3,222 | 78 | 3,300 |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Profit for the period | - | - | - | 973 | 973 | 89 | 1,062 |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Other comprehensive income | - | - | 2,249 | - | 2,249 | (11) | 2,238 |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Other movements | - | - | - | (4) | (4) | - | (4) |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Dividends paid | - | - | - | (663) | (663) | (88) | (751) |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Issue of SABMiller plc ordinary | 6 | 57 | 1,191 | - | 1,254 | - | 1,254 |
| shares | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Payment for purchase of own shares | - | - | - | (8) | (8) | - | (8) |
| for share trusts | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Arising on business combinations | - | - | - | - | - | 14 | 14 |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Buyout of minority interests | - | - | - | - | - | (79) | (79) |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| Credit entry relating to share-based | - | - | - | 37 | 37 | - | 37 |
| payments | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| At 30 September 2009 (unaudited) | 165 | 6,255 | 5,963 | 6,831 | 19,214 | 666 | 19,880 |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+---------------+-----------+---------+
* As restated (see note 12).
The notes form an integral part of this condensed financial information.
The US$1,191 million increase in other reserves in the six months ended 30
September 2009 relates to merger relief arising on the issue of SABMiller plc
ordinary shares for the buyout of minority interests in the group's Polish
business.
+------------------------------------------------------+------------------------------------+
| SABMiller plc | |
+------------------------------------------------------+------------------------------------+
| NOTES TO THE FINANCIAL INFORMATION | |
+------------------------------------------------------+------------------------------------+
1. Basis of preparation
The condensed consolidated interim financial information (the 'financial
information') comprises the unaudited results of SABMiller plc for the six
months ended 30 September 2009 and 30 September 2008, together with the audited
results for the year ended 31 March 2009, restated for further unaudited
adjustments relating to initial accounting for business combinations. Further
details of these adjustments are provided in note 12. The financial information
in this report is not audited and does not constitute statutory accounts within
the meaning of s434 of the Companies Act 2006. The board of directors approved
this financial information on 18 November 2009. The annual financial statements
for the year ended 31 March 2009, approved by the board of directors on 1 June
2009, which represent the statutory accounts for that year, have been filed with
the Registrar of Companies. The auditors' report on those accounts was
unqualified and did not contain a statement made under s237(2) or (3) of the
Companies Act 1985.
The unaudited financial information in this interim report has been prepared in
accordance with the Disclosure and Transparency Rules of the Financial Services
Authority, and with IAS 34 'Interim Financial Reporting' as adopted by the
European Union. The interim financial information should be read in conjunction
with the annual financial statements for the year ended 31 March 2009, which
have been prepared in accordance with IFRS as adopted by the European Union.
Items included in the financial information of each of the group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the functional currency). The consolidated financial
information is presented in US dollars which is the group's presentational
currency.
Accounting policies
The financial statements are prepared under the historical cost convention,
except for the revaluation to fair value of certain financial assets and
liabilities, share-based payments, and pension assets and liabilities.
The accounting policies adopted are consistent with those of the annual
financial statements for the year ended 31 March 2009, which were published in
June 2009, as described in those financial statements except as set out below.
The following standards are mandatory for the first time in the financial year
ending 31 March 2010 and are relevant for the group.
IAS 1 (revised), 'Presentation of financial statements' requires the
presentation of a statement of changes in equity as a primary statement,
includes non-mandatory changes to the titles of primary statements and
introduces a statement of comprehensive income, but allows the presentation of a
two statement approach with a separate income statement and statement of
comprehensive income. The group has chosen to maintain existing primary
statement titles and to follow the two statement approach.
IFRS 8, 'Operating Segments' requires separate reporting of segmental
information for operating segments. Operating segments reflect the management
structure of the group and the way performance is evaluated and resources
allocated based on group revenue and EBITA by the group's chief operating
decision maker, defined as the executive directors. The group is focussed
geographically and as a result of the implementation of IFRS 8, Africa and Asia
are now presented as separate segments. Comparative information has been
restated accordingly. Whilst not meeting the definition of reportable segments,
the group reports separately as segments Asia, South Africa Hotels & Gaming and
Corporate as this provides useful additional information.
The following standards and interpretations have been adopted by the group since
1 April 2009 with no significant impact on its consolidated results or financial
position:
* Amendment to IAS 23, Revised, 'Borrowing Costs'
* Amendment to IFRS 2, 'Share based payments' - Vesting conditions and
cancellations
* Amendment to IFRS 7, 'Financial Instruments: Disclosures'
* Amendment to IAS 32, 'Financial Instruments: Presentation' and IAS 1,
'Presentation of financial statements' - 'Puttable financial instruments and
obligations arising on liquidation'
* Amendment to IAS 39, 'Financial Instruments: Recognition and measurement' -
Reclassification of financial assets
* IFRIC 13, 'Customer Loyalty Programmes'
* Amendment to IFRIC 9, 'Reassessment of Embedded Derivatives'.
2. Segmental information (unaudited)
The segmental information presented below includes the reconciliation of GAAP
measures presented on the face of the income statement to non-GAAP measures
which are used by management to analyse the group's performance.
+---------------+-------------+-----+---+---------+---+-----+---+----------+----------+----+---------+---+-----------+---------------+
| | | | | | | |
+-----------------------------+---------+-------------+---------+--------------------------+-------------+-----------+
| Six months ended | Segment | Share | Group | Segment | Share | Group |
| 30 September: | revenue | of | revenue | revenue | of | revenue |
| | 2009 | associates' | 2009 | 2008 | associates' | 2008 |
| | US$m | and joint | US$m | US$m | and joint | US$m |
| | | ventures' | | | ventures' | |
| | | revenue | | | revenue | |
| | | 2009 | | | 2008 | |
| | | US$m | | | US$m | |
+ + + + + + + +
| | | | | | | | |
+ + + + + + + +---------------+
| | | | | | | | |
+ + + + + + + +---------------+
| | | | | | | | |
+-----------------------------+---------+-------------+---------+--------------------------+-------------+-----------+---------------+
| | | | | | | |
+-----------------------------+---------+-------------+---------+--------------------------+-------------+-----------+
| Latin America | 2,741 | 5 | 2,746 | 2,842 | 6 | 2,848 |
+-----------------------------+---------+-------------+---------+--------------------------+-------------+-----------+
| Europe | 3,201 | 10 | 3,211 | 3,992 | 18 | 4,010 |
+-----------------------------+---------+-------------+---------+--------------------------+-------------+-----------+
| North America | 57 | 2,813 | 2,870 | 1,501 | 1,415 | 2,916 |
+-----------------------------+---------+-------------+---------+--------------------------+-------------+-----------+
| Africa | 802 | 461 | 1,263 | 815 | 535 | 1,350 |
+-----------------------------+---------+-------------+---------+--------------------------+-------------+-----------+
| Asia | 226 | 795 | 1,021 | 248 | 657 | 905 |
+-----------------------------+---------+-------------+---------+--------------------------+-------------+-----------+
| South Africa: | 1,819 | 425 | 2,244 | 1,768 | 425 | 2,193 |
+-----------------------------+---------+-------------+---------+--------------------------+-------------+-----------+
| - Beverages | 1,819 | 232 | 2,051 | 1,768 | 239 | 2,007 |
+-----------------------------+---------+-------------+---------+--------------------------+-------------+-----------+
| - Hotels and | - | 193 | 193 | - | 186 | 186 |
| Gaming | | | | | | |
+-----------------------------+---------+-------------+---------+--------------------------+-------------+-----------+
| | | | | | | |
+-----------------------------+---------+-------------+---------+--------------------------+-------------+-----------+
| Group | 8,846 | 4,509 | 13,355 | 11,166 | 3,056 | 14,222 |
+-----------------------------+---------+-------------+---------+--------------------------+-------------+-----------+
| | | | | | | |
+-----------------------------+---------+-------------+---------+--------------------------+-------------+-----------+
| Year ended 31 | | | | | | | |
| March: | | | | | | | |
+ +-------------------+-------------+---------+--------------+----------+--------------+-------------------------------+
| | | | | | 2009 | 2009 | 2009 |
+---------------+-------------------+-------------+---------+--------------+----------+--------------+-------------------------------+
| | | | | | US$m | US$m | US$m |
+---------------+-------------------+-------------+---------+--------------+----------+--------------+-------------------------------+
| | | | | | | | |
+---------------+-------------------+-------------+---------+--------------+----------+--------------+-------------------------------+
| Latin America | | | | | 5,484 | 11 | 5,495 |
+---------------+-------------------+-------------+---------+--------------+----------+--------------+-------------------------------+
| Europe | | | | | 6,118 | 27 | 6,145 |
+---------------+-------------------+-------------+---------+--------------+----------+--------------+-------------------------------+
| North America | | | | | 1,553 | 3,674 | 5,227 |
+---------------+-------------------+-------------+---------+--------------+----------+--------------+-------------------------------+
| Africa | | | | | 1,615 | 952 | 2,567 |
+---------------+-------------------+-------------+---------+--------------+----------+--------------+-------------------------------+
| Asia | | | | | 470 | 1,095 | 1,565 |
+---------------+-------------------+-------------+---------+--------------+----------+--------------+-------------------------------+
| South Africa: | | | | | 3,463 | 840 | 4,303 |
+---------------+-------------------+-------------+---------+--------------+----------+--------------+-------------------------------+
| - Beverages | | | | | 3,463 | 492 | 3,955 |
+---------------+-------------------+-------------+---------+--------------+----------+--------------+-------------------------------+
| - Hotels and | | | | | - | 348 | 348 |
| Gaming | | | | | | | |
+---------------+-------------------+-------------+---------+--------------+----------+--------------+-------------------------------+
| | | | | | | | |
+---------------+-------------------+-------------+---------+--------------+----------+--------------+-------------------------------+
| Group | | | | | 18,703 | 6,599 | 25,302 |
+---------------+-------------+-----+---+---------+---+-----+---+----------+----------+----+---------+---+-----------+---------------+
Operating profit
The following table provides a reconciliation of operating profit to operating
profit before exceptional items.
+----------------+------------+-------+---+---------+---+----------------------+---+--------+--------+---+---------+---+-------------+----------------+
| Six months ended | Operating | Exceptional | Operating profit | Operating | Exceptional | Operating |
| 30 September: | profit | items | before exceptional items | profit | items | profit |
| | 2009 | 2009 | 2009 | 2008 | 2008 | before |
| | US$m | US$m | US$m | US$m | US$m | exceptional |
| | | | | | | items |
| | | | | | | 2008 |
| | | | | | | US$m |
+ + + + + + + +
| | | | | | | | |
+ + + + + + + +----------------+
| | | | | | | | |
+ + + + + + + +----------------+
| | | | | | | | |
+ + + + + + + +----------------+
| | | | | | | | |
+ + + + + + + +----------------+
| | | | | | | | |
+-----------------------------+-----------+-------------+--------------------------+---------------------+-------------+-------------+----------------+
| | | | | | | |
+-----------------------------+-----------+-------------+--------------------------+---------------------+-------------+-------------+
| Latin America | 458 | 51 | 509 | 411 | - | 411 |
+-----------------------------+-----------+-------------+--------------------------+---------------------+-------------+-------------+
| Europe | 452 | 123 | 575 | 695 | 10 | 705 |
+-----------------------------+-----------+-------------+--------------------------+---------------------+-------------+-------------+
| North America | (3) | - | (3) | 642 | (414) | 228 |
+-----------------------------+-----------+-------------+--------------------------+---------------------+-------------+-------------+
| Africa | 115 | 4 | 119 | 135 | - | 135 |
+-----------------------------+-----------+-------------+--------------------------+---------------------+-------------+-------------+
| Asia | (17) | 1 | (16) | 1 | - | 1 |
+-----------------------------+-----------+-------------+--------------------------+---------------------+-------------+-------------+
| South Africa: | 290 | 21 | 311 | 304 | - | 304 |
| Beverages | | | | | | |
+-----------------------------+-----------+-------------+--------------------------+---------------------+-------------+-------------+
| Corporate | (81) | 11 | (70) | (33) | - | (33) |
+-----------------------------+-----------+-------------+--------------------------+---------------------+-------------+-------------+
| Group | 1,214 | 211 | 1,425 | 2,155 | (404) | 1,751 |
+-----------------------------+-----------+-------------+--------------------------+---------------------+-------------+-------------+
| | | | | | | |
+-----------------------------+-----------+-------------+--------------------------+---------------------+-------------+-------------+
| Year ended 31 | | | | | | | |
| March: | | | | | | | |
+ +--------------------+-------------+--------------------------+------------+--------+-------------+----------------------------------+
| | | | | | 2009 | 2009 | 2009 |
+----------------+--------------------+-------------+--------------------------+------------+--------+-------------+----------------------------------+
| | | | | | US$m | US$m | US$m |
+----------------+--------------------+-------------+--------------------------+------------+--------+-------------+----------------------------------+
| | | | | | | | |
+----------------+--------------------+-------------+--------------------------+------------+--------+-------------+----------------------------------+
| Latin America | | | | | 1,102 | (45) | 1,057 |
+----------------+--------------------+-------------+--------------------------+------------+--------+-------------+----------------------------------+
| Europe | | | | | 448 | 452 | 900 |
+----------------+--------------------+-------------+--------------------------+------------+--------+-------------+----------------------------------+
| North America | | | | | 639 | (409) | 230 |
+----------------+--------------------+-------------+--------------------------+------------+--------+-------------+----------------------------------+
| Africa | | | | | 354 | - | 354 |
+----------------+--------------------+-------------+--------------------------+------------+--------+-------------+----------------------------------+
| Asia | | | | | (2) | - | (2) |
+----------------+--------------------+-------------+--------------------------+------------+--------+-------------+----------------------------------+
| South Africa: | | | | | 704 | - | 704 |
| Beverages | | | | | | | |
+----------------+--------------------+-------------+--------------------------+------------+--------+-------------+----------------------------------+
| Corporate | | | | | (97) | - | (97) |
+----------------+--------------------+-------------+--------------------------+------------+--------+-------------+----------------------------------+
| Group | | | | | 3,148 | (2) | 3,146 |
+----------------+------------+-------+---+---------+---+----------------------+---+--------+--------+---+---------+---+-------------+----------------+
EBITA (segment result)
This comprises operating profit before exceptional items, amortisation of
intangible assets (excluding software) and includes the group's share of
associates' and joint ventures' operating profit on a similar basis. The
following table provides a reconciliation of operating profit before exceptional
items to EBITA.
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+---------------+
| | | | | | | | | |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| Six months | Operating | Share of | Amortisation | EBITA | Operating | Share of | Amortisation | EBITA |
| ended | profit | associates' | of | 2009 | profit | associates' | of | 2008 |
| 30 September: | before | and joint | intangible | US$m | before | and joint | intangible | US$m |
| | exceptional | ventures' | assets | | exceptional | ventures' | assets | |
| | items | operating | (excluding | | items | operating | (excluding | |
| | 2009 | profit | software) - | | 2008 | profit | software) - | |
| | US$m | before | group and | | US$m | before | group and | |
| | | exceptional | share of | | | exceptional | share of | |
| | | items | associates | | | items | associates | |
| | | 2009 | and joint | | | 2008 | and joint | |
| | | US$m | ventures | | | US$m | ventures | |
| | | | 2009 | | | | 2008 | |
| | | | US$m | | | | US$m | |
+ + + + + + + + + +
| | | | | | | | | | |
+ + + + + + + + + +---------------+
| | | | | | | | | | |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+---------------+
| | | | | | | | | |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| Latin America | 509 | - | 57 | 566 | 411 | - | 63 | 474 |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| Europe | 575 | 1 | 14 | 590 | 705 | 2 | 18 | 725 |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| North America | (3) | 360 | 22 | 379 | 228 | 113 | 14 | 355 |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| Africa | 119 | 126 | 1 | 246 | 135 | 104 | - | 239 |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| Asia | (16) | 103 | 3 | 90 | 1 | 68 | 3 | 72 |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| South Africa: | 311 | 75 | - | 386 | 304 | 89 | - | 393 |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| - Beverages | 311 | 22 | - | 333 | 304 | 28 | - | 332 |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| - Hotels and | - | 53 | - | 53 | - | 61 | - | 61 |
| Gaming | | | | | | | | |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| Corporate | (70) | - | - | (70) | (33) | - | - | (33) |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| Group | 1,425 | 665 | 97 | 2,187 | 1,751 | 376 | 98 | 2,225 |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| | | | | | | | | |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| Year ended 31 | | | | | | | | |
| March: | | | | | | | | |
+ +---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| | | | | | 2009 | 2009 | 2009 | 2009 |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| | | | | | US$m | US$m | US$m | US$m |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| | | | | | | | | |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| Latin America | | | | | 1,057 | 1 | 115 | 1,173 |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| Europe | | | | | 900 | 4 | 40 | 944 |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| North America | | | | | 230 | 314 | 37 | 581 |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| Africa | | | | | 354 | 208 | - | 562 |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| Asia | | | | | (2) | 75 | 7 | 80 |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| South Africa: | | | | | 704 | 181 | 1 | 886 |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| - Beverages | | | | | 704 | 60 | - | 764 |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| - Hotels and | | | | | - | 121 | 1 | 122 |
| Gaming | | | | | | | | |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| Corporate | | | | | (97) | - | - | (97) |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+
| Group | | | | | 3,146 | 783 | 200 | 4,129 |
+---------------+---------------+-------------+--------------+----------+-------------+-------------+--------------+----------+---------------+
The group's share of associates' and joint ventures' operating profit is
reconciled to the share of post-tax results of associates and joint ventures in
the income statement as follows:
+------------------------------------------------------+---------+---------+---------+
| | Six | Six | Year |
| | months | months | ended |
| | ended | ended | 31/3/09 |
| | 30/9/09 | 30/9/08 | US$m |
| | US$m | US$m | |
+------------------------------------------------------+---------+---------+---------+
| | | | |
+------------------------------------------------------+---------+---------+---------+
| Share of associates' and joint ventures' operating | 665 | 376 | 783 |
| profit before exceptional items | | | |
+------------------------------------------------------+---------+---------+---------+
| Share of associates' and joint ventures' exceptional | (11) | (33) | (91) |
| items | | | |
+------------------------------------------------------+---------+---------+---------+
| Share of associates' and joint ventures' net finance | (14) | (7) | (25) |
| cost | | | |
+------------------------------------------------------+---------+---------+---------+
| Share of associates' and joint ventures' tax | (63) | (65) | (113) |
+------------------------------------------------------+---------+---------+---------+
| Share of associates' and joint ventures' minority | (27) | (22) | (38) |
| interests | | | |
+------------------------------------------------------+---------+---------+---------+
| | 550 | 249 | 516 |
+------------------------------------------------------+---------+---------+---------+
Excise duties of US$1,859 million (2008: US$2,271 million) have been incurred
during the six months as follows: Latin America US$698 million (2008: US$721
million); Europe US$602 million (2008: US$734 million); North America US$1
million (2008: US$239 million); Africa US$129 million (2008: US$139 million);
Asia US$89 million (2008: US$102 million) and South Africa US$340 million (2008:
US$336 million).
Beer volumes increase during the summer months leading to higher revenues being
recognised in the first half of the year in the Europe and North America
segments. Due to the spread of the business between Northern and Southern
hemispheres, the results for the group as a whole are not highly seasonal in
nature.
The following table provides a reconciliation of EBITDA (the net cash inflow
from operating activities before working capital movements) before cash
exceptional items to EBITDA after cash exceptional items. A reconciliation of
profit for the period for the group to EBITDA after cash exceptional items for
the group can be found in note 9a.
+---------------------+-------------+-------------+---------+-------------+-------------+---------+---------------------+
| Six months ended | EBITDA | Cash | EBITDA | EBITDA | Cash | EBITDA |
| 30 September: | before | exceptional | 2009 | before | exceptional | 2008 |
| | cash | items | US$m | cash | items | US$m |
| | exceptional | 2009 | | exceptional | 2008 | |
| | items | US$m | | items | US$m | |
| | 2009 | | | 2008 | | |
| | US$m | | | US$m | | |
+ + + + + + + +
| | | | | | | | |
+ + + + + + + +---------------------+
| | | | | | | | |
+ + + + + + + +---------------------+
| | | | | | | | |
+ + + + + + + +---------------------+
| | | | | | | | |
+ + + + + + + +---------------------+
| | | | | | | | |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+---------------------+
| | | | | | | |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| Latin America | 712 | (50) | 662 | 621 | - | 621 |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| Europe | 693 | (90) | 603 | 902 | - | 902 |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| North America* | (2) | - | (2) | 244 | (20) | 224 |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| Africa | 168 | (4) | 164 | 171 | - | 171 |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| Asia | - | (1) | (1) | 14 | - | 14 |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| South Africa: | 397 | (20) | 377 | 414 | - | 414 |
| Beverages | | | | | | |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| Corporate | 73 | (11) | 62 | 9 | - | 9 |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| Group | 2,041 | (176) | 1,865 | 2,375 | (20) | 2,355 |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| | | | | | | |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| Year ended 31 | | | | 2009 | 2009 | 2009 |
| March: | | | | | | |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| | | | | US$m | US$m | US$m |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| | | | | | | |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| Latin America | | | | 1,418 | (19) | 1,399 |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| Europe | | | | 1,239 | (6) | 1,233 |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| North America* | | | | 244 | (24) | 220 |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| Africa | | | | 415 | - | 415 |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| Asia | | | | 26 | - | 26 |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| South Africa: | | | | 883 | - | 883 |
| Beverages | | | | | | |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| Corporate | | | | (12) | - | (12) |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+
| Group | | | | 4,213 | (49) | 4,164 |
+---------------------+-------------+-------------+---------+-------------+-------------+---------+---------------------+
* EBITDA excludes the results of associates and joint ventures and hence the
decline in EBITDA for North America is due to the US and Puerto Rico operations
of the Miller business being contributed into the MillerCoors joint venture
during the six months ended 30 September 2008.
3. Exceptional items
+--------------------------------------------+--------+-----------+-----------+----------+--------------------------------------------+
| | | | | |
+--------------------------------------------+--------+-----------+-----------+----------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | 31/3/09 |
| | | 30/9/09 | 30/9/08 | Audited |
| | | Unaudited | Unaudited | US$m |
| | | US$m | US$m | |
+ + + + + +
| | | | | | |
+ + + + + +--------------------------------------------+
| | | | | | |
+--------------------------------------------+--------+-----------+-----------+----------+--------------------------------------------+
| | | | | |
+--------------------------------------------+--------+-----------+-----------+----------+
| Exceptional items included in operating | | | | |
| profit: | | | | |
+--------------------------------------------+--------+-----------+-----------+----------+
| Business capability programme costs | | (170) | - | - |
+--------------------------------------------+--------+-----------+-----------+----------+
| Integration and restructuring costs | | (41) | (23) | (110) |
+--------------------------------------------+--------+-----------+-----------+----------+
| Impairments | | - | - | (392) |
+--------------------------------------------+--------+-----------+-----------+----------+
| Profit on disposal of businesses | | - | 437 | 526 |
+--------------------------------------------+--------+-----------+-----------+----------+
| Unwinding of fair value adjustments on | | - | (10) | (9) |
| inventory | | | | |
+--------------------------------------------+--------+-----------+-----------+----------+
| Litigation | | - | - | (13) |
+--------------------------------------------+--------+-----------+-----------+----------+
| Net exceptional (losses)/gains included | | (211) | 404 | 2 |
| within operating profit | | | | |
+--------------------------------------------+--------+-----------+-----------+----------+
| | | | | |
+--------------------------------------------+--------+-----------+-----------+----------+
| Exceptional items included in net finance | | | | |
| costs | | | | |
+--------------------------------------------+--------+-----------+-----------+----------+
| Business capability programme costs | | (17) | - | - |
+--------------------------------------------+--------+-----------+-----------+----------+
| Gain on early termination of financial | | - | - | 20 |
| derivatives | | | | |
+--------------------------------------------+--------+-----------+-----------+----------+
| Net exceptional (losses)/gains included | | (17) | - | 20 |
| within net finance costs | | | | |
+--------------------------------------------+--------+-----------+-----------+----------+
| | | | | |
+--------------------------------------------+--------+-----------+-----------+----------+
| Share of associates' and joint ventures' | | | | |
| exceptional items: | | | | |
+--------------------------------------------+--------+-----------+-----------+----------+
| Integration and restructuring costs | | (7) | (17) | (33) |
+--------------------------------------------+--------+-----------+-----------+----------+
| Unwinding of fair value adjustments on | | (4) | (7) | (13) |
| inventory | | | | |
+--------------------------------------------+--------+-----------+-----------+----------+
| Impairment of intangible assets | | - | - | (38) |
+--------------------------------------------+--------+-----------+-----------+----------+
| Fair value losses on financial instruments | | - | (9) | (7) |
+--------------------------------------------+--------+-----------+-----------+----------+
| Share of associates' and joint ventures' | | (11) | (33) | (91) |
| exceptional items | | | | |
+--------------------------------------------+--------+-----------+-----------+----------+
| | | | | |
+--------------------------------------------+--------+-----------+-----------+----------+
| Taxation credits relating to subsidiaries' | | | | |
| and the group's share of | | | | |
+--------------------------------------------+--------+-----------+-----------+----------+
| associates' and joint ventures' | | 31 | 19 | 56 |
| exceptional items: | | | | |
+--------------------------------------------+--------+-----------+-----------+----------+--------------------------------------------+
Exceptional items included in operating profit
Business capability programme costs
Following the establishment of the business capability programme which will
streamline finance, human resources and procurement activities through the
deployment of global systems and, within regions, the introduction of common
sales, distribution and supply chain management systems, costs of US$170 million
have been incurred in the period (2008: US$nil).
Integration and restructuring costs
In Europe a total of US$41 million has been charged in relation to the
integration and restructuring of the Romanian business following the acquisition
of Bere Azuga, including the closure of a brewery and in relation to the
restructuring of the Polish business including the closure of the Kielce
brewery.
In 2008, a charge of US$23 million was incurred within operating profit during
the period for staff retention and for certain integration costs of the US and
Puerto Rico operations of the Miller business into the MillerCoors joint
venture.
Profit on disposal of businesses
In 2008, a profit of US$437 million arose on the deemed disposal of the US and
Puerto Rico operations of the Miller business into the MillerCoors joint
venture.
Unwinding of fair value adjustments on inventory
In 2008, on acquisition the Grolsch inventory was fair valued to market value.
The uplift is charged to the income statement as the inventory is sold. US$10
million was charged to operating profit in the six months ended 30 September
2008.
Exceptional items included within net finance costs
Business capability programme costs
As a result of the business capability programme and resultant changes in
treasury systems used and their differing valuation methodologies, a charge of
US$17 million has been incurred to reflect differences on the fair valuation of
financial instruments (2008: US$nil).
Share of associates' and joint ventures' exceptional items
Integration and restructuring costs
During 2009, the group's share of MillerCoors' integration and restructuring
costs was US$7 million and primarily related to relocation.
In 2008, the group's share of MillerCoors' integration and restructuring costs
was US$17 million mainly related to retrenchment costs.
Unwinding of fair value adjustments on inventory
In 2009 the group's share of MillerCoors' charge to operating profit in the
period relating to the unwind of the fair value adjustment to inventory was US$4
million (2008: US$7 million).
Fair value losses on financial instruments
In 2008 the group's share of losses relating to fair value mark to market
adjustments on financial instruments at Hotels and Gaming amounted to US$9
million.
Taxation credits
Taxation credits of US$31 million (2008: US$19 million) were recorded in
relation to exceptional items during the period and included US$4 million (2008:
US$10 million) in relation to MillerCoors although the tax credit is recognised
in Miller Brewing Company (see note 4).
4. Taxation
+--------------------------------------------------+------+-----------+-----------+----------+--------------------------------------------------+
| | | | | |
+--------------------------------------------------+------+-----------+-----------+----------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | 31/3/09 |
| | | 30/9/09 | 30/9/08 | Audited |
| | | Unaudited | Unaudited | US$m |
| | | US$m | US$m | |
+ + + + + +
| | | | | | |
+ + + + + +--------------------------------------------------+
| | | | | | |
+--------------------------------------------------+------+-----------+-----------+----------+--------------------------------------------------+
| | | | | |
+--------------------------------------------------+------+-----------+-----------+----------+
| Current taxation | | 425 | 453 | 670 |
+--------------------------------------------------+------+-----------+-----------+----------+
| - Charge for the period (UK corporation | | 441 | 452 | 693 |
| tax: US$nil (2008: US$nil)) | | | | |
+--------------------------------------------------+------+-----------+-----------+----------+
| - Adjustments in respect of prior years | | (16) | 1 | (23) |
+--------------------------------------------------+------+-----------+-----------+----------+
| Withholding taxes and other remittance taxes | | 35 | 52 | 67 |
+--------------------------------------------------+------+-----------+-----------+----------+
| Total current taxation | | 460 | 505 | 737 |
+--------------------------------------------------+------+-----------+-----------+----------+
| | | | | |
+--------------------------------------------------+------+-----------+-----------+----------+
| Deferred taxation | | (24) | (50) | 64 |
+--------------------------------------------------+------+-----------+-----------+----------+
| - (Credit)/charge for the period (UK corporation | | (24) | (42) | 81 |
| tax: US$nil (2008: US$nil)) | | | | |
+--------------------------------------------------+------+-----------+-----------+----------+
| - Adjustments in respect of prior years | | - | (8) | (14) |
+--------------------------------------------------+------+-----------+-----------+----------+
| - Rate change | | - | - | (3) |
+--------------------------------------------------+------+-----------+-----------+----------+
| | | | | |
+--------------------------------------------------+------+-----------+-----------+----------+
| Total taxation | | 436 | 455 | 801 |
+--------------------------------------------------+------+-----------+-----------+----------+
| Effective tax rate (%) | | 29.4 | 31.0 | 30.2 |
+--------------------------------------------------+------+-----------+-----------+----------+--------------------------------------------------+
See the Financial Definitions section for the definition of the effective tax
rate. The calculation is on a basis consistent with that used in prior years and
is also consistent with other group operating metrics.
MillerCoors is not a taxable entity. The tax balances and obligations therefore
remain with Miller Brewing Company as a 100% subsidiary of the group. This
subsidiary's tax charge includes tax (including deferred tax) on the group's
share of the taxable profits of MillerCoors.
5. Earnings per share
+----------------------------------------------------+-----------+------------+-----------+
| | Six | Six months | Year |
| | months | ended | ended |
| | ended | 30/9/08 | 31/3/09 |
| | 30/9/09 | Unaudited | Audited |
| | Unaudited | US cents | US cents |
| | US cents | | |
+----------------------------------------------------+-----------+------------+-----------+
| Basic earnings per share | 63.0 | 94.8 | 125.2 |
+----------------------------------------------------+-----------+------------+-----------+
| Diluted earnings per share | 62.6 | 94.3 | 124.6 |
+----------------------------------------------------+-----------+------------+-----------+
| Headline earnings per share | 64.6 | 65.8 | 119.0 |
+----------------------------------------------------+-----------+------------+-----------+
| Adjusted basic earnings per share | 80.0 | 75.2 | 137.5 |
+----------------------------------------------------+-----------+------------+-----------+
| Adjusted diluted earnings per share | 79.5 | 74.8 | 136.8 |
+----------------------------------------------------+-----------+------------+-----------+
The weighted average number of shares was:
+----------------------------------------------------+-----------+-------------+-----------+
| | | | |
+----------------------------------------------------+-----------+-------------+-----------+
| | Six | Six months | Year |
| | months | ended | ended |
| | ended | 30/9/08 | 31/3/09 |
| | 30/9/09 | Unaudited | Audited |
| | Unaudited | Millions of | Millions |
| | Millions | shares | of shares |
| | of shares | | |
+----------------------------------------------------+-----------+-------------+-----------+
| Ordinary shares | 1,627 | 1,506 | 1,514 |
+----------------------------------------------------+-----------+-------------+-----------+
| Treasury shares | (77) | - | (7) |
+----------------------------------------------------+-----------+-------------+-----------+
| ESOP trust ordinary shares | (5) | (6) | (5) |
+----------------------------------------------------+-----------+-------------+-----------+
| Basic shares | 1,545 | 1,500 | 1,502 |
+----------------------------------------------------+-----------+-------------+-----------+
| Dilutive ordinary shares from share options | 9 | 8 | 8 |
+----------------------------------------------------+-----------+-------------+-----------+
| Diluted shares | 1,554 | 1,508 | 1,510 |
+----------------------------------------------------+-----------+-------------+-----------+
The calculation of diluted earnings per share excludes 12,672,482 (2008:
13,281,197) share options that were non-dilutive for the period because the
exercise price of the option exceeded the fair value of the shares during the
period and 6,569,614 (2008: 6,922,745) share awards that were non-dilutive for
the period because the performance conditions attached to the awards have not
been met. These share awards could potentially dilute earnings per share in the
future.
Adjusted and headline earnings
The group presents an adjusted earnings per share figure to exclude the impact
of amortisation of intangible assets (excluding capitalised software) and other
non-recurring items in order to present a more useful comparison for the periods
shown in the consolidated financial information. Adjusted earnings per share has
been based on adjusted headline earnings for each financial period and on the
same number of weighted average shares in issue as the basic earnings per share
calculation. Headline earnings per share has been calculated in accordance with
the South African Circular 8/2007 entitled "Headline Earnings" which forms part
of the listing requirements for the JSE Ltd (JSE). The adjustments made to
arrive at headline earnings and adjusted earnings are as follows:
+----------------------------------------------------+-----------+------------+-----------+
| | | | |
+----------------------------------------------------+-----------+------------+-----------+
| | Six | Six months | Year |
| | months | | ended |
| | ended | ended | 31/3/09 |
| | 30/9/09 | 30/9/08 | Audited |
| | Unaudited | Unaudited | US$m |
| | US$m | US$m | |
+----------------------------------------------------+-----------+------------+-----------+
| | | | |
+----------------------------------------------------+-----------+------------+-----------+
| Profit for the financial period attributable to | 973 | 1,423 | 1,881 |
| equity holders of the parent | | | |
+----------------------------------------------------+-----------+------------+-----------+
| Headline adjustments | | | |
+----------------------------------------------------+-----------+------------+-----------+
| Impairment of goodwill | - | - | 364 |
+----------------------------------------------------+-----------+------------+-----------+
| Impairment of intangible assets | - | - | 14 |
+----------------------------------------------------+-----------+------------+-----------+
| Impairment of property, plant and equipment | - | - | 16 |
+----------------------------------------------------+-----------+------------+-----------+
| Loss on disposal of property, plant and equipment | 28 | - | 10 |
+----------------------------------------------------+-----------+------------+-----------+
| Profit on disposal of businesses | - | (437) | (526) |
+----------------------------------------------------+-----------+------------+-----------+
| Tax effects of the above items | (6) | - | (4) |
+----------------------------------------------------+-----------+------------+-----------+
| Minority interests' share of the above items | 3 | - | (1) |
+----------------------------------------------------+-----------+------------+-----------+
| Share of joint ventures' and associates' headline | - | 2 | 34 |
| adjustments, net of tax and minority interests | | | |
+----------------------------------------------------+-----------+------------+-----------+
| Headline earnings | 998 | 988 | 1,788 |
+----------------------------------------------------+-----------+------------+-----------+
| Other adjustments | | | |
+----------------------------------------------------+-----------+------------+-----------+
| Business capability programme costs | 187 | - | - |
+----------------------------------------------------+-----------+------------+-----------+
| Integration and restructuring costs | 9 | 23 | 108 |
+----------------------------------------------------+-----------+------------+-----------+
| Net (gain)/loss on fair value movements on capital | (3) | 26 | 27 |
| items* | | | |
+----------------------------------------------------+-----------+------------+-----------+
| Gain on early termination of financial derivatives | - | - | (20) |
+----------------------------------------------------+-----------+------------+-----------+
| Unwind of fair value adjustments on inventory | - | 10 | 9 |
+----------------------------------------------------+-----------+------------+-----------+
| Litigation | - | - | 13 |
+----------------------------------------------------+-----------+------------+-----------+
| Amortisation of intangible assets (excluding | 73 | 86 | 164 |
| capitalised software) | | | |
+----------------------------------------------------+-----------+------------+-----------+
| Tax effects of the above items | (59) | (48) | (110) |
+----------------------------------------------------+-----------+------------+-----------+
| Minority interests' share of the above items | (3) | (2) | (4) |
+----------------------------------------------------+-----------+------------+-----------+
| Share of joint ventures' and associates' other | 34 | 45 | 90 |
| adjustments, net of tax and minority interests | | | |
+----------------------------------------------------+-----------+------------+-----------+
| Adjusted earnings | 1,236 | 1,128 | 2,065 |
+----------------------------------------------------+-----------+------------+-----------+
* This does not include all fair value movements but includes those in relation
to capital items for which hedge accounting cannot be applied.
6. Dividends
Dividends paid were as follows:
+----------------------------------------------------+-----------+------------+-----------+
| | Six | Six months | Year |
| | months | | ended |
| | ended | ended | 31/3/09 |
| | 30/9/09 | 30/9/08 | Audited |
| | Unaudited | Unaudited | US cents |
| | US cents | US cents | |
+----------------------------------------------------+-----------+------------+-----------+
| | | | |
+----------------------------------------------------+-----------+------------+-----------+
| Prior year final dividend paid per ordinary share | 42.0 | 42.0 | 42.0 |
+----------------------------------------------------+-----------+------------+-----------+
| Current year interim dividend paid per ordinary | - | - | 16.0 |
| share | | | |
+----------------------------------------------------+-----------+------------+-----------+
The interim dividend declared of 17.0 US cents per ordinary share is payable on
11 December 2009 to ordinary shareholders on the register as at
4 December 2009 and will absorb an estimated US$267 million of shareholders'
funds.
7. Goodwill and intangible assets
+--------------------------------------------------------+---------------+--------------+
| | | |
+--------------------------------------------------------+---------------+--------------+
| | Goodwill | Intangible |
| | Unaudited | assets |
| | US$m | Unaudited |
| | | US$m |
+--------------------------------------------------------+---------------+--------------+
| | | |
+--------------------------------------------------------+---------------+--------------+
| Net book amount at 1 April 2009* | 8,715 | 3,741 |
+--------------------------------------------------------+---------------+--------------+
| Exchange adjustments | 1,740 | 696 |
+--------------------------------------------------------+---------------+--------------+
| Arising on increase in share of subsidiary | 1,122 | - |
| undertakings | | |
+--------------------------------------------------------+---------------+--------------+
| Acquisitions through business combinations | 31 | 8 |
+--------------------------------------------------------+---------------+--------------+
| Additions - separately acquired | - | 10 |
+--------------------------------------------------------+---------------+--------------+
| Amortisation | - | (92) |
+--------------------------------------------------------+---------------+--------------+
| Transfers from other assets | - | 6 |
+--------------------------------------------------------+---------------+--------------+
| Net book amount at 30 September 2009 | 11,608 | 4,369 |
+--------------------------------------------------------+---------------+--------------+
* As restated (see note 12).
8. Property, plant and equipment
+-------------------------------------------------+-----------+-------------+------------+
| | Six | Six months | Year |
| | months | ended | ended |
| | ended | 30/9/08* | 31/3/09* |
| | 30/9/09 | Unaudited | Unaudited |
| | Unaudited | US$m | US$m |
| | US$m | | |
+-------------------------------------------------+-----------+-------------+------------+
| | | | |
+-------------------------------------------------+-----------+-------------+------------+
| Net book amount at beginning of period | 7,404 | 9,113 | 9,113 |
+-------------------------------------------------+-----------+-------------+------------+
| Exchange adjustments | 1,257 | (718) | (1,885) |
+-------------------------------------------------+-----------+-------------+------------+
| Additions | 701 | 1,122 | 2,074 |
+-------------------------------------------------+-----------+-------------+------------+
| Acquisitions through business combinations | 25 | 120 | 160 |
+-------------------------------------------------+-----------+-------------+------------+
| Disposals | (50) | (22) | (101) |
+-------------------------------------------------+-----------+-------------+------------+
| Contributed to joint ventures | - | (1,043) | (1,043) |
+-------------------------------------------------+-----------+-------------+------------+
| Impairment | - | - | (16) |
+-------------------------------------------------+-----------+-------------+------------+
| Depreciation | (431) | (459) | (829) |
+-------------------------------------------------+-----------+-------------+------------+
| Other movements | (23) | (49) | (69) |
+-------------------------------------------------+-----------+-------------+------------+
| Net book amount at end of period | 8,883 | 8,064 | 7,404 |
+-------------------------------------------------+-----------+-------------+------------+
* As restated (see note 12).
9a. Reconciliation of profit for the period to net cash generated from
operations (unaudited)
+---------------------------------------------------+-----------+-----------+------------+
| | Six | Six | Year |
| | months | months | ended |
| | ended | ended | 31/3/09 |
| | 30/9/09 | 30/9/08 | Audited |
| | Unaudited | Unaudited | US$m |
| | US$m | US$m | |
+ + + + +
| | | | | |
+ + + + +---------------------------------------------------+
| | | | | |
+---------------------------------------------------+-----------+-----------+------------+---------------------------------------------------+
| | | | |
+---------------------------------------------------+-----------+-----------+------------+
| Profit for the period | 1,062 | 1,565 | 2,157 |
+---------------------------------------------------+-----------+-----------+------------+
| Taxation | 436 | 455 | 801 |
+---------------------------------------------------+-----------+-----------+------------+
| Share of post-tax results of associates and joint | (550) | (249) | (516) |
| ventures | | | |
+---------------------------------------------------+-----------+-----------+------------+
| Interest receivable and similar income | (159) | (270) | (595) |
+---------------------------------------------------+-----------+-----------+------------+
| Interest payable and similar charges | 425 | 654 | 1,301 |
+---------------------------------------------------+-----------+-----------+------------+
| Operating profit | 1,214 | 2,155 | 3,148 |
+---------------------------------------------------+-----------+-----------+------------+
| Depreciation: | | | |
+---------------------------------------------------+-----------+-----------+------------+
| Property, | 318 | 345 | 626 |
| plant and | | | |
| equipment | | | |
+---------------------------------------------------+-----------+-----------+------------+
| Containers | 113 | 114 | 203 |
+---------------------------------------------------+-----------+-----------+------------+
| Container breakages, shrinkage and write-offs | 17 | 12 | 13 |
+---------------------------------------------------+-----------+-----------+------------+
| Loss on sale of property, plant and equipment | 28 | - | 10 |
+---------------------------------------------------+-----------+-----------+------------+
| Impairment of goodwill | - | - | 364 |
+---------------------------------------------------+-----------+-----------+------------+
| Impairment of intangible assets | - | - | 14 |
+---------------------------------------------------+-----------+-----------+------------+
| Impairment of property, plant and equipment | - | - | 16 |
+---------------------------------------------------+-----------+-----------+------------+
| Amortisation of intangible assets | 92 | 108 | 204 |
+---------------------------------------------------+-----------+-----------+------------+
| Unrealised net loss from fair value hedges | 12 | 20 | 14 |
+---------------------------------------------------+-----------+-----------+------------+
| Profit on disposal of businesses | - | (437) | (526) |
+---------------------------------------------------+-----------+-----------+------------+
| Dividends received from other investments | (1) | (1) | (1) |
+---------------------------------------------------+-----------+-----------+------------+
| Charge with respect to share options | 37 | 39 | 79 |
+---------------------------------------------------+-----------+-----------+------------+
| Other non-cash movements | 35 | - | - |
+---------------------------------------------------+-----------+-----------+------------+
| Net cash generated from operations before working | 1,865 | 2,355 | 4,164 |
| capital movements (EBITDA) | | | |
+---------------------------------------------------+-----------+-----------+------------+
| Net inflow/(outflow) in working capital | 300 | (338) | (493) |
+---------------------------------------------------+-----------+-----------+------------+
| Net cash generated from operations | 2,165 | 2,017 | 3,671 |
+---------------------------------------------------+-----------+-----------+------------+
Cash generated from operations before working capital movements includes
cash flows relating to exceptional items of US$168 million in respect of
business capability programme costs, and US$8 million in respect of integration
and restructuring costs (2008: US$20 million in respect of integration and
restructuring costs relating to MillerCoors).
9b. Reconciliation of net cash from operating activities to free cash flow
+---------------------------------------------------+-----------+-----------+------------+
| | Six | Six | Year |
| | months | months | ended |
| | ended | ended | 31/3/09 |
| | 30/9/09 | 30/9/08 | Unaudited |
| | Unaudited | Unaudited | US$m |
| | US$m | US$m | |
+ + + + +
| | | | | |
+ + + + +---------------------------------------------------+
| | | | | |
+---------------------------------------------------+-----------+-----------+------------+---------------------------------------------------+
| | | | |
+---------------------------------------------------+-----------+-----------+------------+
| Net cash from operating activities | 1,499 | 1,178 | 2,183 |
+---------------------------------------------------+-----------+-----------+------------+
| Purchase of property, plant and equipment | (728) | (1,245) | (2,073) |
+---------------------------------------------------+-----------+-----------+------------+
| Proceeds from sale of property, plant and | 20 | 22 | 75 |
| equipment | | | |
+---------------------------------------------------+-----------+-----------+------------+
| Purchase of intangible assets | (11) | (34) | (74) |
+---------------------------------------------------+-----------+-----------+------------+
| Purchase of shares from minorities | (3) | (2) | (5) |
+---------------------------------------------------+-----------+-----------+------------+
| Investments in joint ventures | (142) | (123) | (397) |
+---------------------------------------------------+-----------+-----------+------------+
| Investments in associates | (9) | (5) | (4) |
+---------------------------------------------------+-----------+-----------+------------+
| Repayment of | - | - | 3 |
| investments | | | |
| by associates | | | |
+---------------------------------------------------+-----------+-----------+------------+
| Dividends received from joint ventures | 427 | 81 | 454 |
+---------------------------------------------------+-----------+-----------+------------+
| Dividends received from associates | 39 | 119 | 151 |
+---------------------------------------------------+-----------+-----------+------------+
| Dividends received from other investments | 1 | 1 | 1 |
+---------------------------------------------------+-----------+-----------+------------+
| Dividends paid to minority interests | (95) | (118) | (217) |
+---------------------------------------------------+-----------+-----------+------------+
| Free cash flow | 998 | (126) | 97 |
+---------------------------------------------------+-----------+-----------+------------+
9c. Analysis of net debt (unaudited)
Net debt is analysed as follows:
+----------------------------------------------------+-----------+------------+------------+
| | As at | As at | As at |
| | 30/9/09 | 30/9/08 | 31/3/09* |
| | Unaudited | Unaudited | Unaudited |
| | US$m | US$m | US$m |
+----------------------------------------------------+-----------+------------+------------+
| | | | |
+----------------------------------------------------+-----------+------------+------------+
| Borrowings | (9,738) | (9,414) | (9,308) |
+----------------------------------------------------+-----------+------------+------------+
| Borrowings-related derivative financial | 207 | 83 | 487 |
| instruments | | | |
+----------------------------------------------------+-----------+------------+------------+
| Overdrafts | (265) | (399) | (300) |
+----------------------------------------------------+-----------+------------+------------+
| Finance leases | (13) | (11) | (10) |
+----------------------------------------------------+-----------+------------+------------+
| Gross debt | (9,809) | (9,741) | (9,131) |
+----------------------------------------------------+-----------+------------+------------+
| Cash and cash equivalents (excluding overdrafts) | 464 | 350 | 422 |
+----------------------------------------------------+-----------+------------+------------+
| Net debt | (9,345) | (9,391) | (8,709) |
+----------------------------------------------------+-----------+------------+------------+
Cash and cash equivalents on the balance sheet are reconciled to cash and cash
equivalents on the cash flow as follows:
+----------------------------------------------------+-----------+------------+------------+
| | As at | As at | As at |
| | 30/9/09 | 30/9/08 | 31/3/09* |
| | Unaudited | Unaudited | Unaudited |
| | US$m | US$m | US$m |
+ + + + +
| | | | | |
+ + + + +----------------------------------------------------+
| | | | | |
+----------------------------------------------------+-----------+------------+------------+----------------------------------------------------+
| | | | |
+----------------------------------------------------+-----------+------------+------------+
| Cash and cash equivalents (balance sheet) | 464 | 350 | 422 |
+----------------------------------------------------+-----------+------------+------------+
| Overdrafts | (265) | (399) | (300) |
+----------------------------------------------------+-----------+------------+------------+
| Cash and cash equivalents (cash flow) | 199 | (49) | 122 |
+----------------------------------------------------+-----------+------------+------------+
The movement in net debt is analysed as follows:
+---------------+-------------+------------+------------+-------------+---------+------------+----------+
| | Cash and | Overdrafts | Borrowings | Derivative | Finance | Total | Net debt |
| | cash | US$m | US$m | financial | leases | gross | US$m |
| | equivalents | | | instruments | US$m | borrowings | |
| | (excluding | | | US$m | | US$m | |
| | overdrafts) | | | | | | |
| | US$m | | | | | | |
+---------------+-------------+------------+------------+-------------+---------+------------+----------+
| | | | | | | | |
+---------------+-------------+------------+------------+-------------+---------+------------+----------+
| At 1 April | 422 | (300) | (9,308) | 487 | (10) | (9,131) | (8,709) |
| 2009* | | | | | | | |
+---------------+-------------+------------+------------+-------------+---------+------------+----------+
| Exchange | 68 | (12) | (792) | (8) | (1) | (813) | (745) |
| adjustments | | | | | | | |
+---------------+-------------+------------+------------+-------------+---------+------------+----------+
| Cash flow | (44) | 47 | 234 | - | 1 | 282 | 238 |
+---------------+-------------+------------+------------+-------------+---------+------------+----------+
| Acquisitions | 18 | - | (9) | - | (1) | (10) | 8 |
+---------------+-------------+------------+------------+-------------+---------+------------+----------+
| Other | - | - | 137 | (272) | (2) | (137) | (137) |
| movements | | | | | | | |
+---------------+-------------+------------+------------+-------------+---------+------------+----------+
| At 30 | 464 | (265) | (9,738) | 207 | (13) | (9,809) | (9,345) |
| September | | | | | | | |
| 2009 | | | | | | | |
+---------------+-------------+------------+------------+-------------+---------+------------+----------+
* As restated (see note 12).
The group has sufficient headroom to enable it to conform to covenants on its
existing borrowings. The group has sufficient undrawn financing facilities to
service its operating activities and ongoing capital investment. The group has
the following undrawn committed borrowing facilities available at 30 September
2009 in respect of which all conditions precedent have been met at that date:
+---------------------------------------------------+------------+------------+------------+
| | As at | As at | As at |
| | 30/9/09 | 30/9/08 | 31/3/09 |
| | Unaudited | Unaudited | Audited |
| | US$m | US$m | US$m |
+---------------------------------------------------+------------+------------+------------+
| Amounts falling due: | | | |
+---------------------------------------------------+------------+------------+------------+
| Within one year | 973 | 1,056 | 716 |
+---------------------------------------------------+------------+------------+------------+
| Between one and two years | 398 | 11 | 72 |
+---------------------------------------------------+------------+------------+------------+
| Between two and five years | 1,769 | 736 | 1,272 |
+---------------------------------------------------+------------+------------+------------+
| In five years or more | 57 | 12 | 33 |
+---------------------------------------------------+------------+------------+------------+
| | 3,197 | 1,815 | 2,093 |
+---------------------------------------------------+------------+------------+------------+
Subsequent to 30 September 2009, the US$1,000 million 364 day facility with the
undrawn amount shown as falling due within one year in the table above, was
voluntarily cancelled in part, reducing the size of the facility to US$600
million. The facility was subsequently extended from October 2009 to 6 October
2010 in the amount of US$515 million, with a one year term out option.
10. Commitments, contingencies and guarantees
Except as stated below there have been no material changes to commitments,
contingencies or guarantees as disclosed in the annual financial statements for
the year ended 31 March 2009.
Commitments
Contracts placed for future capital expenditure for property, plant and
equipment not provided in the financial statements amount to US$292 million at
30 September 2009.
As part of the business capability programme the group has entered into
contracts for the provision of IT, communications and consultancy services and
in relation to which the group had commitments of US$210 million at 30 September
2009.
11. Business combinations
Acquisitions
The following business combinations took effect during the period:
In April 2009 control was assumed over Bere Azuga in Romania and the group had a
94.85% interest as at 30 September 2009.
In July 2009 the group acquired an effective 40% interest in Ambo Mineral Water
Share Company in Ethiopia.
In September 2009 the group acquired Maheu, a non-alcoholic maize drinks
business in Zambia.
The following table represents the assets and liabilities acquired in respect of
all business combinations entered into during the six months ended 30 September
2009:
+---------------------------------------------------------------+-----------------+-------------+
| | Carrying | Provisional |
| | values | |
| | pre-acquisition | fair value |
| | US$m | US$m |
+---------------------------------------------------------------+-----------------+-------------+
| | | |
+---------------------------------------------------------------+-----------------+-------------+
| Intangible assets | 4 | 8 |
+---------------------------------------------------------------+-----------------+-------------+
| Property, plant and equipment | 34 | 25 |
+---------------------------------------------------------------+-----------------+-------------+
| Inventories | 4 | 3 |
+---------------------------------------------------------------+-----------------+-------------+
| Trade and other receivables | 2 | 1 |
+---------------------------------------------------------------+-----------------+-------------+
| Cash and cash equivalents | 18 | 18 |
+---------------------------------------------------------------+-----------------+-------------+
| Borrowings | (10) | (10) |
+---------------------------------------------------------------+-----------------+-------------+
| Trade and other payables | (4) | (5) |
+---------------------------------------------------------------+-----------------+-------------+
| | 48 | 40 |
+---------------------------------------------------------------+-----------------+-------------+
| Minority interests | | (14) |
+---------------------------------------------------------------+-----------------+-------------+
| Net assets acquired | | 26 |
+---------------------------------------------------------------+-----------------+-------------+
| Provisional goodwill | | 31 |
+---------------------------------------------------------------+-----------------+-------------+
| Consideration | | 57 |
+---------------------------------------------------------------+-----------------+-------------+
Goodwill represents, amongst other things, tangible and intangible assets yet to
be recognised separately from goodwill, potential synergies and the value of the
assembled workforce.
From the date of acquisition to 30 September 2009 the following amounts have
been included in the group's income statement for the period:
+---------------------------------------------------------------------------+----------+
| | US$m |
+---------------------------------------------------------------------------+----------+
| Income statement | |
+---------------------------------------------------------------------------+----------+
| Revenue | 2 |
+---------------------------------------------------------------------------+----------+
| Operating loss | (5) |
+---------------------------------------------------------------------------+----------+
| Loss before tax | (2) |
+---------------------------------------------------------------------------+----------+
If the date of the acquisitions made in the six months ended 30 September 2009
had been 1 April 2009, then the group's revenue, operating profit and profit
before tax for the six months ended 30 September 2009 would have been as
follows:
+---------------------------------------------------------------------------+----------+
| | US$m |
+---------------------------------------------------------------------------+----------+
| Income statement | |
+---------------------------------------------------------------------------+----------+
| Revenue | 8,855 |
+---------------------------------------------------------------------------+----------+
| Operating profit | 1,211 |
+---------------------------------------------------------------------------+----------+
| Profit before tax | 1,491 |
+---------------------------------------------------------------------------+----------+
12. Balance sheet restatements
Initial accounting
The initial accounting under IFRS 3, 'Business Combinations', for the Grolsch,
Sarmat and Vladpivo acquisitions had not been completed as at 30 September 2008.
During the six months ended 31 March 2009, adjustments to provisional fair
values in respect of these acquisitions, together with adjustments to
provisional fair values in relation to the formation of the MillerCoors joint
venture, were made. As a result comparative information for the six months
ended 30 September 2008 has been presented in this interim financial information
as if the adjustments to provisional fair values had been made from the
respective transaction dates. The impact on the prior period income statement
has been reviewed and no material adjustments to the income statement are
required as a result of the adjustments to provisional fair values. The
following table reconciles the impact on the balance sheet reported as at
30 September 2008 to the comparative balance sheet presented in this interim
financial information.
The initial accounting under IFRS 3, 'Business Combinations', for the Pabod and
Voltic acquisitions had not been completed as at 31 March 2009. During the six
months ended 30 September 2009, adjustments to provisional fair values in
respect of these acquisitions were made. As a result comparative information for
the year ended 31 March 2009 has been presented in this interim financial
information as if the adjustments to provisional fair values had been made from
the respective transaction dates. The impact on the prior period income
statement has been reviewed and no material adjustments to the income statement
are required as a result of the adjustments to provisional fair values. The
following table reconciles the impact on the balance sheet reported as at 31
March 2009 to the comparative balance sheet presented in this interim financial
information.
Balance Sheet
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| | At 30/9/08 | Adjustments | At | At | Adjustments | At |
| | Unaudited | to | 30/9/08 | 31/3/09 | to | 31/3/09 |
| | US$m | provisional | As | Audited | provisional | As |
| | | fair values | restated | US$m | fair values | restated |
| | | Unaudited | Unaudited | | Unaudited | Unaudited |
| | | US$m | US$m | | US$m | US$m |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Assets | | | | | | |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Non-current assets | | | | | | |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Goodwill | 10,030 | 37 | 10,067 | 8,734 | (19) | 8,715 |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Intangible assets | 4,197 | 20 | 4,217 | 3,729 | 12 | 3,741 |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Property, plant and | 8,077 | (13) | 8,064 | 7,404 | - | 7,404 |
| equipment | | | | | | |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Investments in joint | 5,133 | 679 | 5,812 | 5,495 | - | 5,495 |
| ventures | | | | | | |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Other non-current assets | 2,572 | (169) | 2,403 | 2,797 | - | 2,797 |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| | 30,009 | 554 | 30,563 | 28,159 | (7) | 28,152 |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Current assets | | | | | | |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Inventories | 1,300 | (1) | 1,299 | 1,242 | (1) | 1,241 |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Trade and other receivables | 1,759 | (7) | 1,752 | 1,576 | - | 1,576 |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Other current assets | 547 | - | 547 | 642 | 13 | 655 |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| | 3,606 | (8) | 3,598 | 3,460 | 12 | 3,472 |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Total assets | 33,615 | 546 | 34,161 | 31,619 | 5 | 31,624 |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| | | | | | | |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Liabilities | | | | | | |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Current liabilities | | | | | | |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Trade and other payables | (2,686) | (8) | (2,694) | (2,396) | (1) | (2,397) |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Other current liabilities | (2,431) | (4) | (2,435) | (2,945) | - | (2,945) |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| | (5,117) | (12) | (5,129) | (5,341) | (1) | (5,342) |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Non-current liabilities | | | | | | |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Trade and other payables | (239) | (4) | (243) | (186) | - | (186) |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Provisions | (444) | (8) | (452) | (373) | - | (373) |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Deferred tax liabilities | (1,731) | (520) | (2,251) | (2,029) | - | (2,029) |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Other non-current | (8,557) | - | (8,557) | (7,577) | - | (7,577) |
| liabilities | | | | | | |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| | (10,971) | (532) | (11,503) | (10,165) | - | (10,165) |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Total liabilities | (16,088) | (544) | (16,632) | (15,506) | (1) | (15,507) |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Net assets | 17,527 | 2 | 17,529 | 16,113 | 4 | 16,117 |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| | | | | | | |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
| Total equity | 17,527 | 2 | 17,529 | 16,113 | 4 | 16,117 |
+-----------------------------+------------+-------------+-----------+----------+-------------+-----------+
13.Related party transactions
There have been no material changes to the nature or relative quantum of related
party transactions as described in the 2009 Annual Report.
The only changes to key management during the period were the appointments to
the board of Dambisa Moyo on 1 June 2009 and of Howard Willard on 1 August 2009.
Consequently as at 30 September 2009 there were 25 key management (31 March
2009: 23).
14. Post balance sheet events
Subsequent to 30 September 2009, the US$1,000 million 364 day facility was
voluntarily cancelled in part, reducing the size of the facility to US$600
million. The facility was subsequently extended from October 2009 to 6 October
2010 in the amount of US$515 million, with a one year term out option.
On 12 October 2009, SABSA Holdings Pty Ltd, a wholly owned subsidiary of the
group, subscribed for US$65 million preference shares in Tsogo Sun Gaming (Pty)
Ltd (TSG), a wholly owned subsidiary of the group's associate, Tsogo Sun
Holdings Ltd (TSH), as the group's share of the funding for the 30% increase in
the TSH group's effective interest in Tsogo Sun KwaZulu-Natal (Pty) Ltd, the
licensee and operator of the Suncoast Casino in Durban.
+-------------------------------------------------+-----------------------------------------+
| SABMiller plc | |
+-------------------------------------------------+-----------------------------------------+
| FINANCIAL DEFINITIONS | |
+-------------------------------------------------+-----------------------------------------+
Adjusted earnings
Adjusted earnings are calculated by adjusting headline earnings (as defined
below) for the amortisation of intangible assets (excluding software),
integration and restructuring costs, the fair value movements in relation to
capital items for which hedge accounting cannot be applied and other items which
have been treated as exceptional but not included above or as headline earnings
adjustments together with the share of joint ventures' and associates'
adjustments for similar items. The tax and minority interests in respect of
these items are also adjusted.
Adjusted net finance costs
This comprises net finance costs excluding fair value movements in relation to
capital items for which hedge accounting cannot be applied and any exceptional
finance charges or income.
Adjusted profit before tax
This comprises EBITA less adjusted net finance costs and less the group's share
of associates' and joint ventures' net finance costs on a similar basis.
Constant currency
Constant currency results have been determined by translating the local currency
denominated results for the six months ended 30 September at the exchange rates
for the comparable period in the prior year.
EBITA
This comprises operating profit before exceptional items, amortisation of
intangible assets (excluding software) and includes the group's share of
associates' and joint ventures' operating profit on a similar basis.
EBITA margin (%)
This is calculated by expressing EBITA as a percentage of group revenue.
EBITDA
This comprises the net cash generated from operations before working capital
movements.
EBITDA margin (%)
This is calculated by expressing EBITDA excluding cash flows related to
exceptional items incurred during the year as a percentage of revenue.
Effective tax rate (%)
The effective tax rate is calculated by expressing tax before tax on exceptional
items and on amortisation of intangible assets (excluding software), including
the group's share of associates' and joint ventures' tax on the same basis, as a
percentage of adjusted profit before tax.
Free cash flow
This comprises net cash from operating activities less cash paid for the
purchase of property, plant and equipment, intangible assets and shares from
minorities, net investments in associates and joint ventures and dividends paid
to minority interests plus cash received from the sale of property, plant and
equipment and intangible assets and dividends received.
Group revenue
This comprises revenue together with the group's share of revenue from
associates and joint ventures.
Headline earnings
Headline earnings are calculated by adjusting profit for the financial period
attributable to equity holders of the parent for items in accordance with the
South African Circular 8/2007 entitled 'Headline Earnings'. Such items include
impairments of non-current assets and profits or losses on disposals of
non-current assets and their related tax and minority interests. This also
includes the group's share of associates' and joint ventures' adjustments on the
same basis.
Interest cover
This is the ratio of EBITDA plus dividends received from joint ventures to
adjusted net finance costs.
Net debt
This comprises gross debt (including borrowings, borrowings-related derivative
financial instruments, overdrafts and finance leases) net of cash and cash
equivalents (excluding overdrafts).
Organic information
Organic results and volumes exclude the first twelve months' results and volumes
relating to acquisitions and the last twelve months results' and volumes
relating to disposals.
Sales volumes
In the determination and disclosure of sales volumes, the group aggregates 100%
of the volumes of all consolidated subsidiaries and its equity accounted
percentage of all associates' and joint ventures' volumes. Contract brewing
volumes are excluded from volumes although revenue from contract brewing is
included within group revenue. Volumes exclude intra-group sales volumes. This
measure of volumes is used in the segmental analyses as it more closely aligns
with the consolidated group revenue and EBITA disclosures.
+-------------------------------------------------+-----------------------------------------+
| SABMiller plc | |
+-------------------------------------------------+-----------------------------------------+
| FORWARD-LOOKING STATEMENTS | |
+-------------------------------------------------+-----------------------------------------+
This announcement does not constitute an offer to sell or issue or the
solicitation of an offer to buy or acquire ordinary shares in the capital of
SABMiller plc (the "Company") or any other securities of the Company in any
jurisdiction or an inducement to enter into investment activity.
This announcement includes 'forward-looking statements' with respect to certain
of SABMiller plc's plans, current goals and expectations relating to its future
financial condition, performance and results. These statements contain the words
"anticipate", "believe", "intend", "estimate", "expect" and words of similar
meaning. All statements other than statements of historical facts included in
this announcement, including, without limitation, those regarding the Company's
financial position, business strategy, plans and objectives of management for
future operations (including development plans and objectives relating to the
Company's products and services) are forward-looking statements. Such
forward-looking statements involve known and unknown risks, uncertainties and
other important factors that could cause the actual results, performance or
achievements of the Company to be materially different from future results,
performance or achievements expressed or implied by such forward-looking
statements. Such forward-looking statements are based on numerous assumptions
regarding the Company's present and future business strategies and the
environment in which the Company will operate in the future. These
forward-looking statements speak only as at the date of this announcement. The
Company expressly disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statements contained herein to
reflect any change in the Company's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statement is
based. The past business and financial performance of SABMiller plc is not to be
relied on as an indication of its future performance.
+-------------------------------------------------+-----------------------------------------+
| SABMiller plc | |
+-------------------------------------------------+-----------------------------------------+
| ADMINISTRATION | |
+-------------------------------------------------+-----------------------------------------+
SABMiller plc
Incorporated in England and Wales (Registration No. 3528416)
General Counsel and Group Company Secretary
John Davidson
Registered Office
SABMiller House
Church Street West
Woking
Surrey, England
GU21 6HS
Facsimile +44 1483 264103
Telephone +44 1483 264000
Head Office
One Stanhope Gate
London, England
W1K 1AF
Facsimile +44 20 7659 0111
Telephone +44 20 7659 0100
Internet address
http://www.sabmiller.com
Investor Relations
Telephone +44 20 7659 0100
Email: investor.relations@sabmiller.com
Sustainable Development
Telephone +44 1483 264139
Email: sustainable.development@sabmiller.com
Independent Auditors
PricewaterhouseCoopers LLP
1 Embankment Place
London, England
WC2N 6RH
Facsimile +44 20 7822 4652
Telephone +44 20 7583 5000
Registrar (United Kingdom)
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent, England
BR3 4TU
Facsimile +44 20 8658 2342
Telephone +44 20 8639 3399 (outside UK)
Telephone 0871 664 0300 (from UK)
(calls cost 10p per minute plus network extras, lines are open 8.30am-5.30pm
Mon-Fri)
Email: ssd@capitaregistrars.com
www.capitaregistrars.com
Registrar (South Africa)
Computershare Investor Services (Pty) Limited
70 Marshall Street,
Johannesburg
PO Box 61051
Marshalltown 2107
South Africa
Facsimile +27 11 370 5487
Telephone +27 11 370 5000
United States ADR Depositary
The Bank of New York Mellon
Shareholder Services
PO Box 358516
Pittsburgh PA 15252-8516
United States
of America
Telephone +1 888 269 2377
Telephone +1 888 BNY ADRS (toll free within the USA)
Telephone: +1 201 680 6825 (outside USA)
Email: shrrelations@bnymellon.com
www.adrbnymellon.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UWAARKARAAUA
|